article 🔓 Major Ellipal Wallet Breach: $3M XRP Stolen in Sophisticated Attack 💸

A cryptocurrency investor in the United States suffered a devastating loss of $3.05 million in XRP following the security compromise of an Ellipal wallet. Blockchain forensic analysis has connected the stolen funds to the Huione network—a sanctioned criminal marketplace based in Southeast Asia known for large-scale money laundering operations.

Please Register !

Tracing the Stolen Funds

Prominent blockchain investigator ZachXBT conducted an intensive analysis of the incident, revealing a complex laundering process. The attacker initiated over 120 conversion orders on the Bridgers exchange on October 12, 2025, systematically swapping XRP for assets on the Tron network.

Within just three days, by October 15, the entire stolen amount had been successfully funneled through over-the-counter trading desks operating within Huione's extensive criminal ecosystem.

ZachXBT identified the victim's wallet address (r3cf5***Jjkzc) by cross-referencing theft details with a widely circulated YouTube video documenting the incident. Preliminary information suggests the investor had limited technical experience and confirmed the breach resulted from user error, though specific compromise vectors remain unclear.

Please Register !

Huione's Criminal Empire

The Huione network has established itself as a massive money laundering apparatus, processing illicit proceeds from:

• Sophisticated "pig butchering" romance scams

• Large-scale investment fraud schemes

• Human trafficking operations

• Major cryptocurrency exchange hacks

Recent U.S. Treasury Department actions have imposed additional restrictions against Huione following the seizure of $15 billion from the affiliated Prince Group.

Please Register !

Critical Wallet Confusion Issues

The investigation uncovered a troubling industry-wide problem: the victim mistakenly believed they were using Ellipal's cold wallet (hardware storage) while actually operating a hot wallet (software-based), exposing their assets to significantly higher security risks.

According to ZachXBT, this confusion between custodial and non-custodial products frequently enables large-scale thefts. He regularly documents cases where victims transfer funds from exchange accounts to compromised wallets after falling for impersonation scams, often demonstrating limited understanding of fundamental security concepts.

Please Register !

Challenges in Theft Recovery

The victim encountered substantial difficulties when attempting to report the incident to U.S. law enforcement agencies. Few specialized units possess the technical expertise to handle complex cryptocurrency investigations, and the overwhelming volume of similar reports means many cases receive limited attention.

While jurisdictions including the United States, Netherlands, Singapore, and France generally offer better support resources, successful outcomes heavily depend on case assignment and timely reporting.

Recovery prospects remain extremely limited, particularly when reports to qualified private sector investigators are delayed. ZachXBT emphasizes that victims should immediately share theft addresses with knowledgeable parties to maximize detection possibilities.

The investigator also notes that Ripple's ecosystem lacks the robust victim support infrastructure available within Bitcoin, Ethereum, Solana, and major EVM chain communities.

Please Register !

The Recovery Company Trap

ZachXBT has issued strong warnings about predatory recovery services, estimating that over 95% of companies offering fund recovery are essentially scams. These operations typically charge desperate victims substantial fees for basic blockchain analysis reports containing few actionable insights.

Despite receiving over 30 daily assistance requests, the investigator attempts to respond to verified theft cases, though he acknowledges that "self-custody is not the right answer for the vast majority of people."

Please Register !

Huione's $27 Billion Operation

Blockchain analytics firm Elliptic has revealed staggering statistics about Huione's criminal enterprise. Since 2021, Huione Guarantee and its merchant network have processed over $27 billion in cryptocurrency, primarily using Tether's USDT stablecoin.

The Chinese-language marketplace operates through thousands of Telegram channels, with Huione functioning as an escrow provider for merchants offering:

• Money laundering services

• Stolen personal data

• Fake identification documents

• Specialized equipment for scam compound operations

Merchants openly advertise their willingness to launder proceeds from specific fraud types based on perceived freezing risks.

Please Register !

Huione's Political Connections

Huione Guarantee is operated by Huione Group, a Cambodian conglomerate with direct ties to the country's ruling family. One Huione Pay director is Hun To, cousin of current Prime Minister Hun Manet, who has been previously investigated by Australian police for suspected heroin trafficking and money laundering activities.

Elliptic's investigation confirms that Huione International Payments actively launders scam proceeds globally, with representatives discussing handling $2 million from fraud operations for 10.5% service fees.

Please Register !

Resilience of Criminal Networks

Despite Telegram banning thousands of Huione-linked channels and accounts in May following Elliptic's investigation, the criminal ecosystem demonstrated remarkable resilience. When Huione acquired a 30% stake in Tudou Guarantee in December 2024, the platform immediately absorbed displaced activity.

Tudou's transaction volumes surged from negligible levels to over 300,000 by mid-June, while smaller platforms like Shuangying tripled to 110,000 transactions.

Chainalysis confirmed that Huione's core crypto processing infrastructure remained fully operational despite surface-level disruptions, with the platform quickly migrating to new domains and reestablishing Telegram presence within weeks.

Elliptic currently tracks over 30 active guarantee marketplaces across Southeast Asia, all continuing identical criminal services despite enforcement efforts.