WazirX Hack Update: Will Investors Get Their Money Back?

WazirX Hack Update: Indian Crypto Exchange Suffers $230 Million Loss

Thursday, July 18, 2024:

On Thursday, July 18, 2024, Indian cryptocurrency exchange WazirX was compromised in a devastating security breach. The attack resulted in the theft of over $230 million worth of crypto assets.

WazirX Hack: What Happened?

WazirX announced on their social media platform X that their multisig wallet had been compromised. The wallet was secured using Liminal's digital asset custody and wallet infrastructure.

Despite security measures, the attackers exploited a discrepancy between the data displayed on Liminal's interface and the transaction contents. This allowed them to gain control over the wallet.

The breach targeted WazirX's Ethereum multisig wallet, affecting both Ethereum (ETH) and ERC-20 tokens. The attackers stole 15,298 ETH, which they subsequently swapped for other assets, resulting in a total of 59,097 ETH (approximately $218 million).

WazirX's Response and Actions

In response, WazirX swiftly suspended INR and crypto withdrawals to protect remaining assets. They also filed a police complaint and reported the incident to relevant authorities.

WazirX has reached out to over 500 exchanges to block the identified addresses involved in the theft. Other exchanges have also reportedly cooperated with the investigation.

WazirX and Liminal have blamed each other for security lapses. Liminal claims no compromise of their infrastructure and accuses WazirX of vulnerabilities.

Recovery Efforts

Recovering the stolen funds is challenging. The hacker's Ethereum holdings have increased significantly through the liquidation of stolen assets. Additionally, they have used Tornado Cash to obscure the funds' origin and destination.

WazirX is working with forensic experts and law enforcement agencies to track the funds and identify the perpetrators. They have also received support from the crypto community.

Impact on WazirX Investors

For WazirX investors, the primary concern is whether they will recover their funds. Key factors influencing the outcome include:

• Tracing and Recovery Efforts: Forensic investigations and collaboration with law enforcement and exchanges are crucial.
• Community Support: The involvement of the crypto community enhances tracing and recovery chances.
• Legal Actions: Legal actions can assist in apprehending perpetrators and recovering funds.
• Compensation Plans: If funds cannot be fully recovered, WazirX may need to create compensation plans for affected investors.
• Use of Tornado Cash: If the stolen assets are transferred to Tornado Cash, recovery may be challenging.
• No Insider Job: WazirX's founder, Nischal Shetty, denies insider involvement, indicating a sophisticated external attack.