HTX User Private Keys Infringed, Former Exchange Employee Gets 3 Years in Prison

Key Points:

• 3 ex-employees received three-year prison terms for stealing over 27,000 mnemonics and 10,000 HTX user private keys from a virtual wallet.
• HTX reported a Trojan horse attack by a former employee and is cooperating with authorities in the investigation.

According to Wu Blockchain, the Xuhui District People’s Court handed a three-year prison sentence to Liu, Zhang, and Dong for their participation in one of the largest crypto thefts in a recent legal ruling.

Read more: The British Regulator Warns 143 Crypto Firms, Including HTX and KuCoin

Ex-employees Sentenced for Stealing Cooperative User Private Keys

The trio, former staff of HTX, was found to have illegally gained access to more than 27,000 mnemonics and 10,000 HTX user private keys from crypto wallet software. It had planted a backdoor program in March 2023 that allowed the harvesting of HTX user private keys. Before the culprits could destroy the server and database in May 2023, the stolen data was used to convert over 19,000 digital wallet addresses.

Separately, Zhang had faced charges over another virtual wallet platform, this one used by another reporter, Ou. Back in July 2021, Zhang had planted a backdoor into that virtual wallet platform’s software. The malicious code gathered HTX user private keys and mnemonics during transactions and mailed them to Zhang’s email.

HTX Addresses Data Breach Linked to Former Employee’s Trojan Horse

Under financial pressure, Zhang used the stolen data in April 2023 to sweep all of Ou’s virtual currency into his wallet. Zhang was later convicted for the criminal offense of illegally accessing more than 6,400 HTX user private keys and mnemonics and was sentenced to a three-year prison term, in addition to a fine in the amount of RMB 50,000.

Wu Blockchain also cited a report from 2023 whereby a Trojan horse from an ex-HTX employee exposed user data from iToken, formerly Huobi Wallet. HTX explained it as a personal act of an ex-employee, saying that HTX has been assisting in inquiries with the Shanghai Public Security Bureau thus far.