Major Crypto Wallet Service Shuts Down After $3M XRP Theft

The company confirmed it will end all hot wallet operations and shift its focus entirely to developing and supporting offline storage devices.

A Strategic Retreat Toward Offline Security

Rather than continuing to split its attention between mobile and hardware products, Ellipal is doubling down on what it considers its core strength – cold wallet technology. The firm announced that hot wallet services will officially wind down by October 31, after which all development resources will be directed toward enhancing offline crypto protection.

In its notice to users, Ellipal urged those still holding assets in its mobile wallets to migrate funds to new wallet addresses as soon as possible. The company added that its customer service teams will remain active during the transition to prevent potential losses.

Ellipal framed the decision as a necessary evolution, citing the growing sophistication of cyberattacks targeting connected wallets and exchanges. The company stressed that “offline security must take precedence over convenience” in a market increasingly defined by high-stakes exploits.

The XRP Breach That Changed Everything

The pivot follows an alleged theft of roughly $3.05 million in XRP, which thrust Ellipal into the spotlight earlier this month. According to blockchain researcher ZachXBT, the attacker exploited weaknesses in a user’s setup, executing more than 120 transactions that converted Ripple assets into Tron-based tokens via the Bridgers exchange on October 12.

By mid-October, those funds were traced through over-the-counter trading desks connected to Huione, a Southeast Asian money-laundering network previously flagged by U.S. authorities. The entire chain of transactions highlighted the speed and scale at which stolen crypto can be moved and obscured across blockchains.

Rethinking Wallet Security in 2025

The Ellipal incident reignited debate over how wallet providers balance usability and security. Hot wallets – apps that connect directly to the internet – offer faster transactions but remain exposed to malware, phishing, and remote exploits. Cold wallets, by contrast, isolate private keys from online environments, significantly reducing the attack surface.

Analysts say Ellipal’s decision could set a precedent for other wallet companies under increasing pressure to prove that their products are safe in a landscape of escalating threats. With digital assets now representing billions in individual and institutional holdings, any perception of vulnerability can be devastating for trust.

A Turning Point for Custody Providers

For Ellipal, this marks both an end and a beginning. By abandoning hot wallet services altogether, the company is repositioning itself as a purist in crypto security – focused solely on devices that operate completely offline. Industry observers note that this move could help restore confidence among users rattled by recent exploits.

As digital asset thefts grow more sophisticated, Ellipal’s shift signals a broader realization in the crypto space: convenience may no longer justify exposure. In 2025’s security-conscious market, going cold might be the only way to stay safe.