$83M XRP Moved by Hackers, Spotlight on Ripple's Limits

Following a major security incident involving Bitget, attackers have transferred approximately $83 million worth of stolen XRP out of three holding wallets, according to CoinDesk. Another $75 million in XRP remains in accounts that cannot be frozen due to the inherent rules of the XRP Ledger.

The Movement of Funds

The theft of nearly 103 million XRP occurred on Thursday, with the funds initially split across five accounts. By Saturday, 12:41 UTC, two accounts originally holding 20 million XRP each saw their balances plummet to just 23 and 55 tokens respectively. A third account's balance was reduced to about 5.8 million XRP, indicating active laundering efforts.

Understanding Ripple's Lack of Freeze Authority

This incident underscores a critical design feature of the XRP Ledger: Ripple the company does not have unilateral authority to freeze the native XRP asset. Such control is reserved only for tokens that Ripple issues on behalf of enterprise clients on the ledger.

  • Native vs. Issued Assets: XRP, as the network's native fuel, is designed to be decentralized and censorship-resistant. Ripple cannot interfere with its on-chain movement.
  • The Exchange's Limited Role: Centralized exchanges can block deposits from suspicious addresses on their platforms, but they cannot freeze assets within the hacker's on-chain wallet.

Actions by Other Asset Issuers

In contrast to XRP, centralized stablecoin issuers have taken action. Circle and Tether have frozen approximately $320,000 in stablecoins linked to the incident, demonstrating the control these entities retain over their tokens.

Exchange Response and User Protection

The affected exchange, Bitget, has stated that losses from the incident will be covered by its "Protection Fund," ensuring user balances remain unaffected. The platform plans to resume withdrawal services in phases between September 28 and October 2. This move aims to maintain user confidence and contain the fallout.

The event reignites discussions on security within the crypto ecosystem, particularly highlighting the defined boundaries of what different parties can—and cannot—do when large-scale theft involves native blockchain assets.