Monero (XMR) Price Soars 38% as Bitcoin is Converted to the Privacy Coin

Monero (XMR), the privacy-focused cryptocurrency, experienced a dramatic price surge reaching $317 on Sunday after a suspected hacker converted approximately $330 million worth of Bitcoin into XMR tokens.

A suspected hacker converted approximately $330 million worth of Bitcoin into Monero (XMR) tokens on Sunday, pushing the privacy-focused cryptocurrency to a peak of $317, reports The Block. This represents one of the largest single-day movements into the privacy coin, sparking discussion in cryptocurrency circles about both security vulnerabilities and Monero's unique position in the cryptocurrency ecosystem.

The incident began Sunday evening when the hacker moved over 3,000 Bitcoin from a long-term holder's wallet to multiple exchanges. According to prominent blockchain detective ZachXBT, who first identified the suspicious transactions, the Bitcoin was transferred at 10:11 pm London time to six different exchanges where it was swapped for XMR.

ZachXBT's investigation, later corroborated by on-chain researcher Yehor Rudytsia from Hacken, revealed these Bitcoin had been held since 2017, with the owner only beginning to move funds about a month ago. ZachXBT noted that the method employed was "inefficient for a normal person," as the hacker lost "multiple seven figures to fees" due to their approach.

"[They're] gonna lose multiple seven figures to fees," ZachXBT said. "Inefficient for a normal person to buy like this." The inefficient conversion method provides further evidence that this was indeed a theft rather than a legitimate holder diversifying their portfolio.

Following the incident, Monero's price shot up 38% to reach $317, its highest level since 2021. This surge demonstrates how relatively illiquid the XMR market has become following multiple exchange delistings over the past year. By Monday, the token had settled around $280, still representing a 22% increase from its pre-incident value.

The price volatility highlights a paradox for privacy coins: the same features that make them valuable from a privacy perspective also contribute to market instability, as regulatory pressure forces many exchanges to delist them, reducing overall market liquidity.

The timing of this incident is particularly notable as European regulators are currently considering legislation that would effectively ban privacy-enhancing cryptocurrencies like Monero. Major exchanges including Binance, OKX, and Kraken have already delisted XMR across multiple jurisdictions, significantly reducing trading liquidity.

"This incident is a theft," Rudytsia told crypto news outlet DL News, confirming that "all major forensic agencies are tracking the situation." The high-profile nature of this hack may accelerate regulatory scrutiny of privacy coins, potentially leading to further restrictions in major markets.

Despite the negative circumstances surrounding the price surge, the incident inadvertently demonstrated Monero's core value proposition: transaction privacy. Once the funds were converted to XMR, they effectively vanished from public tracking, as Monero's privacy features obscure transaction details, including sender, receiver, and amount information.

These privacy features have earned Monero a dedicated following among those concerned about financial surveillance, though they have also made it a target for regulators concerned about potential illicit uses.

The incident comes at a time when many cryptocurrency observers have noted the growing divergence between Bitcoin's increasingly institutional character and the original cypherpunk ideals that inspired its creation. While Bitcoin has gained mainstream acceptance through ETFs and corporate adoption, Monero has maintained a focus on privacy and resistance to surveillance, even at significant cost to its market access. Even popular non-custodial wallets, such as Exodus, are ending support.

Despite facing delistings and regulatory challenges, Monero's market capitalization remains over $5 billion, suggesting significant demand for financial privacy tools in the digital age. This resilience aligns with cypherpunk principles emphasizing individual sovereignty and privacy as fundamental rights in the digital realm.

Security experts, including ZachXBT, have suggested the attack may have been facilitated through social engineering rather than technical vulnerabilities. ZachXBT and Rudytsia flagged that the funds were transferred in small increments to exchanges, creating hundreds of orders, a classic tactic employed by hackers attempting to obfuscate the origin of stolen funds. The victim had held over 3,000 Bitcoin since 2017 and only recently began moving funds, potentially indicating compromise of private keys or access credentials.

The incident serves as a reminder of cryptocurrency's security paradox: while blockchain technology provides unprecedented transparency and security at the protocol level, individual wallet security remains vulnerable to various attack vectors, including social engineering, phishing, and malware.