As a seasoned analyst with years of experience in the digital assets industry, I find myself increasingly concerned about the ongoing saga between WazirX and Liminal Custody. The blame game between these two parties, while common in such situations, is causing unnecessary distress to thousands of investors who are eagerly awaiting the return of their funds.
Following the announcement by WazirX cryptocurrency exchange that their previous security partner, Liminal Custody, was responsible for a hack leading to a loss of approximately Rs 2000 crore, Liminal has countered by casting doubt on the overall security measures and practices of the exchange.
A representative from Liminal Custody, a company specializing in digital asset security, has stated that they are unable to verify the legitimacy of the forensic audit performed by WazirX. Instead, they raised doubts about the exchange’s network infrastructure and its operational practices.
In simpler terms, Liminal Custody’s statement implies that they cannot provide comments based on WazirX’s audit report because there is no information available about how the audit was conducted and its scope. However, if we consider the details shared by WazirX, it raises significant concerns regarding the safety of their network infrastructure, safekeeping procedures during operations, and overall security measures, particularly since they were responsible for managing 5 out of 6 keys.
On Monday, WazirX announced that a third-party forensic audit was carried out regarding the hack that took place on July 18th. The results supposedly showed no evidence of a breach originating from WazirX, but suggested that the potential security incident may have occurred on Liminal’s side instead, as indicated by the report from Mandiant.
Following the July 18 cyberattack that resulted in approximately 20 billion INR being stolen from one multi-signature digital wallet of WazirX, the two involved companies have since grown distant and exchanged harsh words in public.
As a crypto investor, I can share that Liminal assured us their internal audit found no breach originating from their user interface (UI) or front end. They’ve also invited Mandiant and WazirX to independently investigate the devices connected with Liminal during the July 18 hacking incident, aiming for a fair and unbiased assessment of the situation.
According to our initial assessments, there appears to be no evidence of a security breach in our front-end or user interface (UI). However, we have engaged several reputable independent auditors for a thorough forensic analysis, with detailed reports expected soon. We are optimistic that our front-end and UI remain secure, and we will promptly share the findings once they become available. For your peace of mind, we welcome additional audits, even from renowned firms like Mandiant, to conduct a comprehensive UI audit. Our commitment to transparency is unwavering.
Immediately following WazirX’s announcement about the forensic audit on social media, I, as a researcher, found myself posing queries directly to Liminal Custody – a company we had recently collaborated with – via the appropriate platform.
In my role as a researcher, I’d like to express that it appeared to me that Liminal swiftly attributed blame towards WazirX laptops following the incident without presenting any substantial evidence. Conversely, WazirX opted to engage Mandiant, a forensic team owned by Google, for an exhaustive examination of the three laptops implicated in the case.
— Nischal (Shardeum) 🔼 (@NischalShetty) August 19, 2024
As a crypto investor, I’ve been caught in the ongoing tussle between WazirX and Liminal Custody, with thousands of us eagerly waiting for access to our funds. Since July 18th, an estimated 4000 crore worth of investor funds were accessible, but a cyber attack led to a loss of nearly 45%. To prevent any further withdrawals, the exchange immediately secured the remaining 55% of customer funds; this situation remains unchanged to this day.
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2024-08-19 15:00