XRP Healthcare has formalised a halt to operations and entered a delisting process for the XRPH and XRPHAI tokens. A prolonged bear market and failed efforts to secure exchange listings were presented as surface reasons, but technical weaknesses in its wallet raised since the project’s early days have emerged as the direct backdrop to the closure.

On Sept. 10 (local time), blockchain outlet U.Today reported that XRP Healthcare said its liquidation was inevitable and it could no longer continue the project. The company explained that the main causes included an extended bear market and failed listing efforts.

XRP Healthcare has pursued building a blockchain-based healthcare ecosystem for about 3 years. With the decision to halt operations, delisting procedures for XRPH and XRPHAI are expected to proceed. Each platform will decide separately the timing of trading halts and rules related to withdrawals.

A July 3 attack in particular sharply increased the financial burden. The attacker stole funds from about 4,011 XRPH wallets, with losses totaling about $452,000. The stolen assets were reported to include 267,664 XRP and the project’s own tokens. Investigators found the issue was not a security problem with the XRP Ledger itself but a vulnerability in the wallet code of the XRP Healthcare application.

The core issue was how the wallet generated seed phrases. The explanation was that the wallet algorithm generated seed phrases with low entropy, creating a structure that allowed an attacker to reconstruct private keys offline. Decompiling the application also confirmed that users’ seed phrases were being transmitted over the network.

XRP Healthcare management said it only realised after the hack that seed phrases were being sent over the network. It said it fully trusted the developers and did not identify the problem in advance.

Controversy over the project’s technical issues spread further after former Ripple-related developers criticised it publicly. Matt Hamilton (맷 해밀턴), Vet Goose (벳 구스) and Hazard Cookie (해저드 쿠키) said on Sept. 6 that the project’s collapse had already been foreseeable. XRP Healthcare was also previously known as XRPayNet.

Vet Goose said he had personally rejected an earlier request for grants from the XRP Healthcare team. He pointed out that documents submitted at the time included inaccurate claims related to partnerships. He also criticised the project, saying a proprietary token was not necessarily required to build a healthcare platform and the wallet structure lacked professionalism.

Matt Hamilton and Hazard Cookie also claimed they had identified major risks and suspicious operational practices within the project years ago. They said management at the time did not accept criticism from the community.

The company countered that the criticisms were inappropriate, but it failed to provide sufficient grounds to rebut specific technical issues raised about the wallet structure.

The incident has prompted an assessment that XRP Healthcare’s shutdown was the result of a combination of technical defects and internal management problems, going beyond a simple market downturn. As the wallet’s weak code structure and seed phrase management issues surfaced one after another after the hack, the project’s chances of recovery also appear to have effectively vanished. The remaining steps have moved to finalising delisting schedules by exchange and notices on users’ asset withdrawals.