Investigation Uncovers $3 Million XRP Phishing Theft
Blockchain investigator ZachXBT has uncovered a significant phishing scheme resulting in the theft of $3 million worth of XRP. The incident affected a US-based cryptocurrency holder's Ellipal wallet, with the stolen funds subsequently laundered through a financial group based in Cambodia. This event raises serious concerns regarding wallet security practices, potentially impacting XRP market dynamics and underscoring the risks associated with the misuse of recovery phrases.
ZachXBT meticulously mapped and publicly exposed the flow of the stolen funds. Ellipal, the provider of the wallet in question, has stated that their offline products remain secure. The victim reportedly imported their recovery phrase into a hot wallet by mistake, which inadvertently exposed their funds to the phishing attack. ZachXBT clarified the situation, stating:
"The victim thought they were using an Ellipal cold wallet, but had actually imported their recovery phrase into a hot wallet, which exposed the funds online."
$3 Million XRP Theft Prompts Exchange Alerts and Warnings
The theft involved approximately 1.2 million XRP tokens, which were subsequently converted into other digital assets through cross-chain swaps. Binance responded swiftly to reports of the theft, freezing a portion of the stolen XRP. Warnings from the cryptocurrency community emerged, urging users to exercise extreme caution in managing their recovery phrases. While exchanges reacted promptly, a significant portion of the stolen funds managed to bypass major detection channels.
The movement of funds through sanctioned entities like Huione introduces potential financial and regulatory concerns. FinCEN's recent final rule, which severs Huione Group from the US financial system, highlights the implications for US operations and entities involved in such transactions. Historical data from similar events suggests that such incidents can lead to short-term price declines for affected digital assets, and exchanges may face considerable challenges in recovering the misappropriated assets.
Past Incidents Underscore XRP's Vulnerability to Hacks
Previous security breaches, including a notable hack in 2025 that affected the wallets of Ripple co-founder Chris Larsen, highlight recurring vulnerabilities within the cryptocurrency ecosystem. XRP, due to its liquidity and network structure, continues to be a frequent target for malicious actors. The use of cross-chain swaps further complicates efforts related to asset recovery and regulatory oversight.
Experts in the field suggest that enhanced vigilance and the adoption of improved wallet security practices in the future could help mitigate the occurrence of such incidents. Historical trends indicate that tracing and recovering funds that pass through multiple blockchain networks presents significant challenges for regulatory bodies and law enforcement agencies.