- XT Exchange suspends withdrawals.
- PeckShield reports a $1.7 million hack.
- Stolen funds converted to 461.58 ETH.
For crypto investors, centralized exchanges are still the most popular trading option. However, traders are occasionally reminded of the risks of trusting 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.
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
- Users on centralized exchanges typically don’t have custody over their crypto. “Not your keys, not your crypto” is an expression that reflects this reality. This means that users must trust an exchange and not steal their crypto.
- Major exchanges are not immune from misusing user funds. FTX is a prominent example, whose collapse cost its users billions.
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.
Read more about crypto hacks and scams:
Here’s How Much Crypto Lost to Hacks and Scams In October
Read more about new IRS rules on crypto.
IRS Tightens Grip on Crypto with New 2025 Rules
