Veteran sleuth who traced $1.4B crypto hack slams XRP community
Popular blockchain investigator ZachXBT has spurred debate by announcing he will no longer support the XRP community, dismissing it as "exit liquidity for insiders."
In a post replying to an X user, Ducky-Royal, he claimed that Ripple holders offer "nothing of value to the industry" and lumped XRP with Cardano, Pulsechain, and Hedera as networks that are not worth supporting.
ZachXBT was one of the first investigators to dig into the Bybit hack of November 2023, when over $1.4 billion in crypto was drained from the exchange. He traced the stolen funds across multiple wallets and linked the attack to the North Korean Lazarus Group. His on-chain investigation helped exchanges and analysts piece together the scale of what became one of the largest hacks in crypto history.
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Why is ZachXBT not supporting XRP anymore
ZachXBT's concerns stem in part from how the community was handling scams. In a response to a post asking about an "XRP Ledger Forensics group" to follow and freeze disposed funds, Zach suggested that the only sensible option for victims would be to fill out IC3 paperwork and trace the transactions to exchanges.
An actual answer: Due to the amount stolen the best option is to file an IC3 report and trace to exchanges.
— ZachXBT (@zachxbt) August 28, 2025
The Ripple foundation is cheap and no longer funds public goods that provide guidance to their community unlike other chains.
Learn more about the industry and scams… pic.twitter.com/cNdXwGx6MH
He also took a shot at the community, saying, "Ripple Foundation is cheap and no longer funds public goods" to defend or educate users, unlike a number of blockchain projects that have done so.
Zach felt that the lack of institutional protections added an extra layer of risk to XRP holders, which contributed to his decision to walk away from the community.
His comments sparked backlash from traders and seemingly reopened the door to questions about XRP Ledger's design.
Why ZachXBT is against XRP
- Scam handling failures
- Lack of institutional support
- Extra risk for holders
Is there a loophole in XRP Ledger?
At the same time, defenders of the XRP ecosystem have pushed back against the story that the ledger offers no utility.
Much of the recent discussion has focused on the XRP Ledger's trust line systems, which enable two parties to exchange value (using stablecoins or a portion of issued tokens) without requiring XRP to serve as a mediator.
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Crypto veteran and YouTuber, Cheeky Crypto, dived into the nuances. "Some mentioned that the two parties can use the XRP ledger to transfer value without using XRP at all, aside from a tiny little fee to kind of keep the network coming. Now, my eyebrows, of course, shot up. Wait, what did I see? And what did I read?" said Cheeky Crypto.
The veteran analyst says that some of the newcomers were confused by this, making it seem like a loophole that rendered XRP irrelevant.
However, he mentions, Ripple CTO David Schwartz clarified that it was by design as far back as 2004. Crypto Cheeky adds:
"The ability to move value without XRP is not a bug or an exploit. It. It's a feature.. baked directly into the DNA of the XRP ledger from day one."
XRP won't be threatened
In addition, trust lines don't eliminate the future of XRP, believes the analyst. Trust lines operate by utilizing closed bank networks or stablecoin issuers.
The future of XRP as a trustless option is crucial, particularly when bridging between networks or when interacting with unknown parties worldwide.
As David Schwartz said, in some cases, trust relationships may be more advantageous, but that does not diminish XRP's function in the marketplace as a neutral asset with global liquidity.
At press time, XRP is trading at $3.01, up 420.83% over a year.