February 1, 2024 at 10:44 GMTModified date: February 1, 2024 at 10:44 GMT
February 1, 2024 at 10:44 GMT

XRP market reacts to Ripple co-founder’s account compromise

Rumours swirled on Twitter about Ripple being hacked for an enormous 213 million $XRP. However, it was later clarified to be an unauthorised access to Ripple co-founder Chris Larsen’s personal accounts

XRP market reacts to Ripple co-founder’s account compromise

On 31 January, the cryptocurrency community was abuzz with rumours that Ripple, a prominent player in the digital currency space, had been hacked for a staggering 213 million $XRP.

These reportedly originated on X (formerly Twitter), but the hack was later clarified to be a case of “unauthorised access” to the personal accounts of Ripple co-founder Chris Larsen.

The situation came to light following a tweet from crypto investigator ZachXBT, who initially suggested that Ripple might have been compromised for approximately 213 million $XRP, valued at around $112.5 million.

However, Larsen quickly addressed these concerns, stating:

Larsen further reassured the community that it was an isolated incident. Ripple’s wallets are secure and were never at risk. 

He added: “We’ve verified that most of the impacted funds were moved out of XRP. We’re collaborating with law enforcement, and a significant portion of the funds has been frozen. We’re actively pursuing the remaining amount.”

Ripple CEO Brad Garlinghouse also spoke out against the spread of misinformation regarding the incident. He emphatically stated on social media, “To clear any confusion, NO Ripple-managed wallets were compromised. Full stop.”

ZachXBT was the first to notice the unusual transactions, initially attributing them to Ripple itself. 

On 30 January, eight transactions were made, ranging from 400,000 XRP ($200,000) to 69.7 million $XRP. These funds were then transferred to various cryptocurrency exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC.

$XRP, ranked as the sixth-largest cryptocurrency by market capitalisation according to CoinMarketCap, is the native token of the XRP Ledger, which is built by San-Francisco based company Ripple Labs.

This blockchain is known for its specialisation in payment solutions. Ripple Labs, the creator of the network, utilises it for RippleNet, a cross-border payment platform aimed at financial institutions.

In 2020, Ripple Labs faced a lawsuit from the US Securities and Exchange Commission (SEC), which accused the company of fraudulently selling $XRP tokens without registering them as securities.

Larsen was directly named in the lawsuit. However, in a significant turn of events in July 2023, a judge ruled in favour of Ripple Labs, stopping short of categorising $XRP as a definitive security.

Impact on $XRP’s market performance

Despite the clarification and quick response to the security breach, $XRP’s market value experienced a downturn. 

The digital currency saw a decline of over 2%, currently trading at $0.49 and showing a bearish trend.

Technical indicators were also on the negative side of its charts. Both the Awesome Oscillator and Moving Average Convergence/Divergence (MACD) were emanating red histograms below their respective zero lines. 

The broader cryptocurrency market was also down by about 1.9% daily. At the time of press, its market capitalisation stood at $1.69 trillion, with top coin Bitcoin trading below its key resistance at $45,000.