Security Breach Hits HTX and Heco Chain Resulting in $97M Token Loss

A security breach hit the crypto exchange HTX and blockchain protocol Heco Chain, causing a combined loss of $97 million across various tokens. Confirmed by crypto entrepreneur Justin Sun, an investor in HTX, he reassured users that the exchange would fully compensate for any losses incurred.

As part of the response plan, deposits and withdrawals on HTX are currently suspended. However, unaffected funds remain secure, as stated by Sun. The breach was initially identified by blockchain security firm Cyver, suspecting a leaked private key as the root cause. This potential leak allowed unauthorized entry into the Heco bridge, enabling token transfers between Heco Chain and Ethereum.

Although HTX and Heco Chain operate separately, HTX is one of the maintainers of Heco Chain. This incident marks the second security breach associated with Suns projects, the first being a smaller-scale theft in October at HTX, where hackers took 500 ether, valued at approximately $8 million at the time. Those losses were also fully covered.

PeckShield, another blockchain security firm, noted a transfer of over $86.6 million in digital assets from the HECO Chain bridge to suspicious addresses. The evidence suggested a compromise of the bridge itself, with transactions initiated by the operator pointing to a potential operator compromise.

Launched in December 2020, HECO merged into a unified ecosystem with Tron and BitTorrent‘s bridge in October 2022, aiming for high performance and seamless cross-chain user experiences. This recent breach adds to Sun’s challenges, following an exploit at Poloniex, a crypto exchange he acquired in 2018, which incurred a $125 million loss due to compromised private keys.

Poloniex has reported progress in recovery efforts, working with a top security audit firm to bolster protective measures. Justin Sun, also the founder of Tron, offered hackers a 5% ‘white hat bounty’ within seven days to return the stolen funds before involving law enforcement, providing crypto wallet addresses for the return.

Crypto exchanges, frequent targets of hackers, have faced similar incidents in recent months, including breaches at HTX, Bitrue, Gdac, and Deribit, resulting in substantial losses.

Justin Sun faces charges from the US Securities and Exchange Commission, including market manipulation, fraud, and other offenses. Additionally, eight celebrities, such as actress Lindsay Lohan and rapper Soulja Boy, have been accused of unlawfully endorsing Suns crypto assets.