XT Exchange Suspends Withdrawals Amid Alleged Hack

Users of another centralized exchange may have lost access to their coins. On Thursday, November 28, XT Exchange notified its users that it suspended all coin withdrawals.

Crypto investors still largely prefer using centralized exchanges to trade their digital assets. However, every once in a while, traders are reminded of the risks of entrusting centralized entities with their crypto.

Most recently, XT Exchange, a centralized exchange ranked 23rd on CoinGecko, has suspended all withdrawals. While the exchange cited maintenance, security experts suggested it suffered a $1.7 million hack. At the same time, some users are voicing concerns over a rug pull.

XT Exchange Suspends Withdrawals Amid Alleged Hack

Users of another centralized exchange may have lost access to their coins. On Thursday, November 28, XT Exchange notified its users that it suspended all coin withdrawals. The exchange cited a “wallet upgrade and maintenance” as the reason. However, security experts suggest that there are likely other reasons involved.

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PeckShield, a prominent security firm, alleged that the exchange suffered a hack. According to the company’s social media, approximately $1.7 million worth of crypto was transferred from the exchange’s wallet.

#PeckShieldAlert Our community member has detected that @XTexchange appears to have been hacked for ~$1.7 million worth of cryptos. The hacker has swapped the stolen funds for 461.58 $ETH & sit in 0xB43f…8F83 pic.twitter.com/bwINPguXlZ

The exchange subsequently released a statement acknowledging the suspicious transfer. However, it denied that the transfer was a hack and claimed that all funds were safe. “Rest assured, this will not affect our users,” the exchange claimed.

Where Did The XT Exchange Funds Go?

The statement provided little reassurance to the users who still can’t withdraw their funds. According to on-chain data, the “hacker” converted the funds from XT Exchange’s hot wallet to 461.58 Ether (ETH), which are currently held in a separate wallet.

Centralized crypto exchanges have a history of security incidents, often involving insiders. WazirX, a major crypto exchange in India, allegedly suffered a $230 million hack. However, some users alleged that insider rug pull was a more likely explanation.

When insiders rug pull an exchange, their priority is maintaining appearances. This is to avoid panic among users and to get unsuspecting users to deposit more funds. Once all the users wise up, the exchange typically goes dark.

On the Flipside

Why This Matters

The XT Exchange incident highlights important issues with crypto custody and centralized exchanges (CEXs). Users who want to use CEXs need to make sure they trust those in charge, both to protect their funds from hacks and to avoid misuse of their crypto.

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