Over the past two months, Justin Sun, the founder of Tron, has faced a series of security breaches targeting his cryptocurrency businesses. These incidents have raised significant concerns in the crypto community and have led to substantial financial losses.
The first of these incidents involved Sun’s HTX crypto exchange. This platform, previously known as Huobi, was rebranded to HTX on September 13, 2023, and shortly after, on September 24, 2023, it experienced its first major security breach. An unidentified hacker managed to steal nearly $8 million in cryptocurrencies. This was a significant setback for the newly rebranded exchange, which Sun had acquired in October 2022.
However, this was not the end of HTX’s security woes. The exchange suffered another attack, resulting in a loss of $30 million due to a compromise in its hot wallet system. Initially, the loss was reported to be $13.6 million, but further investigations revealed the higher figure.
The attacks were not limited to HTX alone. Other platforms associated with Sun also faced security breaches. For instance, the cryptocurrency exchange Poloniex, which Sun acquired in 2019, was hit by a major security breach on November 10. In this incident, hackers managed to steal at least $100 million in cryptocurrencies. The breach was suspected to be due to a private key compromise, as suggested by blockchain security firm CertiK.
Additionally, the HTX Eco Chain (HECO) bridge, a tool for transferring digital assets between HTX and other networks like Ethereum, also fell victim to a security breach. On November 22, hackers compromised the HECO bridge and transferred at least $86.6 million to suspicious addresses.
In total, these four hacking incidents over the last two months have resulted in combined losses of around $208 million. Despite these setbacks and Sun’s commitment to compensating the losses, there has been a growing concern within the crypto community. Some users have advised caution when using platforms like Poloniex and HTX, with debates emerging about the potential sources of these attacks.
One theory, suggested by a spokesperson from the crypto security firm Hacken, is that these repeated attacks on Sun’s projects might be due to insider involvement, potentially involving the leakage of private keys. The spokesperson emphasized the need for these projects to improve their procedures for storing sensitive information and to consider using cold wallets for part of their funds to enhance security.
In response to the most recent attack, a spokesperson from HTX assured that the company would fully compensate users for their losses. They also stressed that these incidents should not impact the broader Tron and BitTorrent ecosystems. Meanwhile, Poloniex has yet to issue an official response regarding the hack.
These hacking incidents occur amidst ongoing legal challenges for Sun. In March 2023, the United States Securities and Exchange Commission (SEC) filed a civil lawsuit against Sun, alleging fraud and other securities law violations involving his companies, including Tron and BitTorrent. In April 2023, a U.S. court issued a summons to Sun at his Singapore address, and as of August, the SEC confirmed that litigation against Sun was still in progress.
Over $100 million in various cryptocurrencies, including Ethereum and Tron.
HTX suffered two hacks, one involving nearly $8 million and another with a $30 million loss due to a hot wallet breach.
Yes, Sun promised full compensation for the losses and offered a 5% reward for the return of the stolen funds.
There’s no clear information on the full recovery of the stolen funds. Sun mentioned freezing a portion of the assets associated with the hackers’ addresses.
These incidents have raised significant concerns about the security of Sun’s crypto platforms and have coincided with his legal challenges in the U.S.
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