What happened?
A US-based XRP holder lost $3.05 million (about 1.2M XRP) after their Ellipal wallet was compromised and the funds were traced to laundering networks tied to the sanctioned Huione marketplace. Blockchain investigator ZachXBT showed the attacker ran 120+ Ripple-to-Tron conversions through Bridgers on October 12, 2025, then moved everything onto the Tron chain and into OTC desks by October 15. The victim appears inexperienced, saying it was user error, and recovery looks unlikely because the funds were quickly mixed into Huione-linked laundering channels.
Who does this affect?
This hits the individual victim and other retail users who think they’re safely holding crypto in “cold” wallets but may actually be exposed to hot-wallet risks. It also affects XRP holders, Ellipal customers, and anyone using chains and OTC desks that criminals exploit to cash out stolen tokens. Law enforcement, blockchain investigators, and recovery firms are affected too, since many agencies lack the resources to respond quickly and recovery prospects are poor.
Why does this matter?
Big thefts laundered through networks like Huione — which analytics say processed roughly $27 billion — erode trust in self-custody and wallet providers and can spook retail investors. Quick conversions and OTC wash-throughs create selling pressure and make stolen supply hard to trace, which can hurt XRP’s market perception and add volatility. The episode highlights systemic risks from resilient criminal laundering ecosystems and will likely increase calls for tighter custody practices, exchange vigilance, and regulatory scrutiny.