A viral YouTube video this week revealed how a U.S. investor lost 1.2 million XRP, worth about $3.05 million, from their Ellipal wallet. The story quickly spread across the crypto community for both its scale and the way it exposed a serious problem within the digital asset world: confusion between wallet types and product designs.
Blockchain investigator ZachXBT traced the movements of the stolen XRP and uncovered how efficiently the funds were moved across networks before vanishing into global laundering channels.
How the Theft Unfolded
On October 12, 2025, the attacker carried out more than 120 Ripple-to-Tron swaps using a service called Bridgers, previously known as SWFT. On blockchain explorers, the transactions appeared as Binance-linked because Bridgers uses the exchange’s liquidity.
By October 15, the money had been fully laundered through over-the-counter networks associated with Huione, an illicit online marketplace based in Southeast Asia. Huione has been involved in laundering billions from online scams, human trafficking, and large-scale crypto frauds.
Recently, U.S. authorities imposed additional restrictions on Huione in connection with the $15 billion Prince Group seizure, tightening efforts to curb illegal financial activity in the region.
The Wallet Confusion That Cost Millions
What makes this case particularly alarming is that it was not a sophisticated hack but a mistake. The victim believed they were using the Ellipal cold wallet, which stores crypto assets offline. In reality, they were using a hot wallet connected to the internet, leaving it vulnerable to compromise.
This kind of mix-up is common. Many crypto companies offer both custodial and non-custodial wallets under the same brand, which often causes users to misunderstand how their funds are stored.
There have also been many cases of impersonation scams where victims are tricked into moving their coins into fake security wallets or support accounts after being contacted by people pretending to represent official crypto platforms.
Law Enforcement Gaps
After realizing the loss, the victim struggled to reach U.S. law enforcement for help. Despite the size of the theft, it was difficult to find an agency with the right expertise to investigate. Many departments are overwhelmed by the growing number of crypto-related crimes.
Countries such as the United States, Netherlands, Singapore, and France tend to be more responsive, but outcomes depend heavily on the individual officers handling the case. Pursuing civil recovery, especially across borders, often becomes very costly and time-consuming.
The case also reveals a lack of victim support within the XRP community. While networks like Bitcoin, Ethereum, and Solana have strong public channels for theft reporting, Ripple’s ecosystem remains more fragmented.
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