Unraveling the Ripple Hack: Speculation and Investigation Surrounding the $112.5 Million XRP Breach

Amidst new waves of speculation, details from an investigation into the recent breach reveal the withdrawal of 213 million XRP, valued at approximately $112.5 million, from the wallet of Ripple’s co-founder.

Following the breach, funds were initially redirected to eight different wallets before ultimately finding their way to centralized exchanges. In its investigation, Hacken flagged one wallet, a new address involved in a $64 million transaction, directly linked to a cluster of addresses, connecting some outbound and inbound transactions.

Hacken’s investigation concluded that two wallets connected to the authorized XRP wallet played significant roles in the hacking incident. Among the exchange addresses, an address from Kraken (rLHzPsX6oXkzU2qL12kHCH8G8cnZv1rBJh) stands out, speculated to have been used for fund transfers. It is also presumed that the wallet used in the breach had long-term relationships with XRP, considering its interactions with the mentioned Kraken wallet in 2020.

In response to Hacken’s investigation, Schwartz, a researcher at Hacken, criticized their lack of understanding of how the XRP Ledger operates. He pointed out that all Kraken accounts share a single XRP deposit address:

rLHzPsX6oXkzU2qL12kHCH8G8cnZv1rBJh. Therefore, a unique and mandatory destination tag is needed to distinguish and allocate the deposit to the correct account.

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Thomas Silkjær, Head of Analytics and Compliance at the XRP Ledger Foundation, confirmed Kraken’s use of a single XRP deposit address since 2014. He emphasized that, in this scenario, reviewing the reused destination tags, as suggested by Hacken’s investigation, would be invalid.

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