In yet another multi-million dollar hack, over 23 million of Ripple’s XRP token appears to have been stolen. The siphoned XRP amounts to approximately $10 million USD in value. The hack appears to impact only GateHub-based XRP Ledger wallets. As is usually the case, the funds were not held in a secure, cold-storage style of wallet. GateHub quickly responded when made aware of the hack, outlining the chain-of-events that may have led to the theft.
In a curious case, the actual mechanism for the hack seems to have come from API requests – all of which held a legitimate token. These Application Program Interface protocols allow users to manage their funds through third party software. Many analytic and trading bots use APIs to operate, but it does open an avenue for attacks. GateHub noticed an uptick in API requests to the impacted wallets, and subsequently invalidated all current API tokens to halt the attack. As the API requests all had valid tokens, it suggests that the actual issue lay upstream of GateHub itself – although the fact that only GateHub was impacted may speak to an exploitable flaw in their system.
Cryptocurrency Increasingly Targeted by Hackers
This is merely the most recent in a prolific string of hacks throughout the past year. In fact, more than half of all cryptocurrency hacks have occurred since the start of 2018. This is an unfortunate side effect of the increased popularity of cryptocurrency as an investment tool. Unlike fiat currency, which often has multiple layers of protection and strict forensic tracking, cryptocurrency is immutable and decentralized. This offers the perfect opportunity for hackers, if user funds are not properly managed.
Even Binance, often viewed as one of the safest locations to trade cryptocurrency, suffered a high-profile hack recently. The Binance hack exposed some worrying trends, including the potential ability of larger exchanges to influence the mining pool into a hard fork. Luckily, this didn’t happen, but the potential still exists and is worrying for anyone with a vested interest in the decentralized component of cryptocurrency.
Why is Everyone Out to Kill Ripple & XRP?
While this hack focused solely on Ripple’s XRP token, it is unlikely to impact the continued success of the number three cryptocurrency by market cap. Ripple’s heavy focus on establishing a foreign exchange liquidity pool has made them an attractive partner for international banks. They’ve made considerable progress, despite encroaching threats from traditional companies looking to invade the cryptocurrency space.
News emerged earlier in 2019 that JP Morgan Chase intended to launch their own ‘JPMorgan Coin’ as a direct competitor to XRP. Ripple CEO Brad Garlinghouse remained unimpressed by the threat. The most recent potential competition comes from Facebook’s new GlobalCoin project – aimed at providing easy cash transfers within the Facebook ecosystem. However, Ripple remains specifically poised to conquer the global remittance market and it’s unlikely that JP Morgan or Facebook will be able to stop XRP.
Article By: Adam Stone