As a seasoned analyst with years of experience in the cryptocurrency industry, I find myself increasingly perplexed by the ongoing saga between WazirX and Liminal Custody. The latest development, with WazirX yet to transfer user funds despite two months post-hack, raises more questions than answers.
On August 14th, WazirX exchange officials disclosed that they are terminating their partnership with their previous security provider, Liminal Custody, and will be transferring all remaining assets from Liminal’s custody. This decision comes in response to the July 18th cyber attack on WazirX’s multi-signature wallet, which led to a theft of approximately Rs 2000 crore and a strained relationship between the exchange and Liminal Custody. The incident resulted in the loss of 45% of user funds.
Currently, The Crypto Times is aware that WazirX’s leadership has not yet moved the remaining 55% of user assets from Liminal Custody’s multi-signature wallets, despite earlier claims that they were negligent in protecting cryptocurrency funds. However, Liminal has denied these accusations and insists that the breach originated from WazirX’s own system.
As a crypto investor, I recently learned that a representative from Liminal Custody has acknowledged that the WazirX team hasn’t transferred the leftover user funds from their custody, contrary to what was expected in light of recent events.
Currently, a considerable portion of their funds has not been withdrawn from their digital wallets since the security incident. It’s important to note that the customers are using Liminal’s self-custodial wallet software, where they hold five out of six keys, keeping most control over their assets. This means they can initiate transactions and move their assets independently, without requiring assistance from Liminal or the Liminal key. We firmly believe that the Liminal platform remains secure and efficiently handles transactions worth millions, maintaining its robust and seamless operation.
said a spokesperson for Liminal Custody.
The latest revelation begets an important question as to why WazirX is yet to transfer user funds from Liminal despite two months post hack, if they continue to blame the latter for failure to prevent hack.
The Fall-Off Between WazirX and Liminal Custody Explained
After the hack on July 18, WazirX management stated that a forensic audit found no impact on laptops linked to WazirX, suggesting the breach originated from Liminal’s system instead. Nischal Shetty, WazirX co-founder, accused Liminal Custody of negligence in protecting user funds and declared intentions to sever ties with them.
Approximately three weeks after, Liminal Custody publicly declared that they performed a thorough forensic examination, revealing no signs of a breach in the front end, back end, user interface or devices. They strongly asserted that the reported Rs 2000 crore hack was probably originated from WazirX and emphasized their lack of control over the multi-signature wallets.
The leaders of WazirX have suggested to the Singapore High Court that they distribute the leftover user funds in a way that’s fair for everyone (socialistic distribution). This means that every user might experience some negative impact. It is uncertain if WazirX will transfer user funds from Liminal Custody’s wallets, considering their criticism of the security measures provided by Liminal Custody.
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2024-09-17 16:22