Huobi Global's HTX exchange fell victim to a major hack on September 24, resulting in the loss of $7.9 million worth of digital assets. The breach was brought to light by the blockchain analytics platform Cyvers, sending shockwaves through the crypto community.
However, what sets this incident apart is the exchange's claim to have unmasked the hacker's identity and a surprising offer of a "white-hat bonus" to the culprit, provided they return most of the stolen funds. A message, written in Chinese, emerged from a known Huobi hot wallet, addressed directly to the hacker.
HTX's Response
The message asserted that Huobi Global had successfully identified the attacker and had an unconventional proposition. The exchange offered to let the hacker retain 5% of the stolen funds as a "white-hat bonus" if they chose to return the remaining 95%.
????Red Code????Yesterday, our ML-powered system detected a suspicious transaction involving @HuobiGlobal and @HTX_Global.Despite our attempts to reach out, we received no response. An EOA received 5K $ETH $7.9M from @HuobiGlobal's hot wallet.???? This morning, we spotted… pic.twitter.com/3oqHhAVi8P
— ???? Cyvers Alerts ???? (@CyversAlerts) September 25, 2023
On the morning of September 24, at 10:00 am UTC, the suspected Huobi hot wallet executed a transfer, sending 4,999 Ether, equivalent to approximately $7.9 million, to an address without any previous transaction history. This transfer marked the beginning of a chain of events that led to the proposition of a white-hat bonus by the exchange.
Huobi Global's investor, Justin Sun, publicly acknowledged the hack today (Monday). He disclosed, "HTX @HTX_Global has suffered a loss of 5,000 #Eth ($8 million USD) due to a hacker attack." Notably, Sun assured users that their funds remained secure, and the exchange had swiftly resolved all related issues.
HTX @HTX_Global has suffered a loss of 5,000 #Eth ($8 million USD) due to a hacker attack. HTX has fully covered the losses incurred from the attack and has successfully resolved all related issues. All user assets are #SAFU and the platform is operating completely normally.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) September 25, 2023
Huobi, a prominent exchange with a decade of history, recently rebranded to HTX. This rebranding represents a fusion of Huobi's legacy, the TRON token, and the core values of a cryptocurrency exchange. Beyond rebranding, HTX changed its listing strategy. The exchange emphasized community involvement, allowing users to participate in the decision-making process regarding which assets to list.
Rebranding and Regulatory Challenges
On August 4, reports surfaced, hinting at troubles within Huobi. These reports centered on claims that representatives of the exchange had been detained in China, allegedly due to their involvement with gambling platforms. Simultaneously, the exchange's total value locked (TVL) plummeted by $500 million, from over $3 billion to $2.5 billion.
Meanwhile, as part of its commitment to regulatory compliance, Huobi secured regulatory approval from the Financial Services Commission (FSC) for the British Virgin Islands last year. This authorization, granted to its local subsidiary, Brtuomi Worldwide Limited (BWL), enabled the offering of institutional-grade crypto derivative products in the region.
In May, the exchange faced regulatory intervention in Malaysia by the Securities Commission Malaysia (SCM), resulting in the shutdown of its operations due to a lack of proper registration as a local cryptocurrency operator. Furthermore, this legal issue led to the blocking of Huobi's website and mobile applications in the country.
This article was written by Jared Kirui at www.financemagnates.com.
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