Solana wXRP Faces $290 Million Security Shock... 'My Coins Could Be Stolen Too'

▲ Hacking. Cryptocurrency transaction/ChatGPT generated image

A warning has been issued that Wrapped XRP (wXRP) issued on the Solana network could be exposed to structural vulnerabilities similar to a recent large-scale hacking incident.

According to CoinGeek, a virtual asset specialized media, on April 20 (local time), XRP Ledger validator VET pointed out that wXRP circulating in the Solana (SOL) ecosystem carries inherent security risks as it relies on intermediary structures and cross-chain infrastructure. VET emphasized via X (formerly Twitter) that, “As seen in the KelpDAO hacking incident utilizing LayerZero, issued assets inevitably carry counterparty risk.”

This warning was raised immediately after the KelpDAO hacking incident that occurred on April 18. At the time, attackers unauthorizedly generated approximately 116,500 rsETH, a liquid restaking token, and used it as collateral to borrow and drain Ethereum (ETH) and WETH from DeFi lending platforms such as AAVE V3. The stolen amount reached $292 million, and the funds were reportedly laundered through Tornado Cash.

VET positively evaluated wXRP for providing XRP exposure opportunities in Solana-based applications but pointed out its fundamental limitations in terms of security. He explained, “wXRP is merely an issued asset, and its risk level is significantly higher compared to native XRP, which is held directly.” He further warned, “Investors must clearly understand the structure and risks of the assets they hold.”

Following the KelpDAO incident, cross-chain related protocols immediately took action. The Flare network temporarily suspended FXRP transfers between major networks such as Ethereum and Base. This proactive measure halted bridge functions until the investigation is complete, and currently, users holding FXRP on networks other than Flare have limited asset redemption.

This incident has brought the security of wrapped assets and cross-chain bridges to the forefront as a key risk across the market. Concerns are also being raised that potential defaults related to KelpDAO could spread to major DeFi protocols like AAVE, leading to a contraction in investor sentiment. As the awareness that asset security should take precedence over technical convenience strengthens, Solana's wXRP security measures and the resolution process of the KelpDAO incident are emerging as variables that will determine the future direction of the market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*