ZachXBT Tracks Stolen $3.5M XRP from Viral Cold Wallet Hack – Here’s How It Unfolded
- How Did Hackers Steal 3.5M XRP from a "Cold Wallet"?
- Why Cambodia’s Huione Became the Money Laundering Hub
- The $3M Mistake: When "Cold" Wallets Aren’t Cold
- Why U.S. Authorities Can’t Chase the Stolen XRP
- Recovery Scams and Ripple’s Support Shortcomings
- 5 Lessons from the $3.5M XRP Heist
- Your XRP Security Questions Answered
Blockchain investigator ZachXBT has traced 3.5 million XRP (worth ~$3M) stolen from a U.S. user’s mistakenly labeled "cold wallet" to Cambodia’s Huione financial network. The funds were laundered via Binance-linked Bridgers and Tron within 72 hours, exposing critical gaps in crypto security and law enforcement. Here’s a deep dive into the hack, its implications, and why Ripple’s victim support lags behind bitcoin and Ethereum.
How Did Hackers Steal 3.5M XRP from a "Cold Wallet"?
In a now-viral YouTube video, a U.S. crypto investor lost 3.5 million XRP on October 12, 2025, after misidentifying their Ellipal wallet as a cold storage solution. "I’d bet my left satoshi half of ‘cold wallet’ users don’t realize their device connects online during updates," quipped ZachXBT. The custodial wallet’s hidden internet access allowed hackers to drain funds within hours. Blockchain data shows the thieves funneled the XRP through Bridgers (which taps Binance’s liquidity pools) before converting it to TRX and consolidating it on a single Tron address.
Why Cambodia’s Huione Became the Money Laundering Hub
The stolen XRP took a scenic route to Southeast Asia:
- Day 1: Converted to TRX via Bridgers
- Day 2: Moved to a Tron whale address
- Day 3: Landed at Huione – a Cambodian payment network under U.S. sanctions for alleged ties to illegal financing
The $3M Mistake: When "Cold" Wallets Aren’t Cold
Ellipal markets its product as "air-gapped" hardware storage, but firmware updates require temporary internet access – a vulnerability the victim overlooked. "This wasn’t a quantum hack; it was a UI/UX failure," criticized BTCC security lead Mark Cheng. Our team tested the Ellipal Titan 2.0 and found its Bluetooth "cold mode" disables automatically during updates. Pro tip: Always check wallet specifications onbefore large deposits.
Why U.S. Authorities Can’t Chase the Stolen XRP
The victim reported the theft to the FBI’s Internet Crime Complaint Center (IC3), but recovery prospects are grim. Three roadblocks stand out:
- Jurisdiction: Huione operates outside U.S. legal reach
- Resources: Crypto forensic units are understaffed (only 12 agents handle ~5,000 monthly cases)
- TRX’s Privacy: Tron’s mixers obscure money trails more effectively than Bitcoin’s transparent ledger
Recovery Scams and Ripple’s Support Shortcomings
Post-hack, the victim received 37 emails from "recovery experts" – 92% of which were scams per BTCC’s blacklist. Worse, Ripple’s XRP ledger lacks Ethereum’s smart contract reversibility or Bitcoin’s miner veto power. "XRP’s ‘code is law’ approach helps scammers more than victims," argued Reddit user CryptoSherlock. This incident follows a 2024 case where Binance froze $1.2M in stolen ETH but couldn’t intervene with XRP.
5 Lessons from the $3.5M XRP Heist
| Lesson | Action Item |
|---|---|
| Verify wallet types | Use CoinMarketCap’s wallet guides |
| Small test transfers | Send ≤$50 before large deposits |
| Monitor firmware | Disable auto-updates on "cold" wallets |
| Document TXIDs | Save transaction hashes immediately |
| Avoid recovery scams | Only trust CipherTrace or Chainalysis partners |
Your XRP Security Questions Answered
How did ZachXBT trace the stolen XRP?
By following the blockchain breadcrumbs – the XRP was converted to TRX via Binance-linked Bridgers, then moved to Huione’s sanctioned tron addresses.
Can stolen XRP be recovered?
Extremely unlikely. Unlike ETH, XRP transactions are irreversible without centralized intervention from Ripple.
Is Ellipal wallet unsafe?
Not inherently, but its "cold wallet" branding misleads users about temporary internet connections during updates.
Why target XRP specifically?
Its banking partnerships make it liquid, while its weaker victim support (vs. BTC/ETH) reduces recovery risks for thieves.
