As a seasoned researcher with extensive experience in the crypto space, I can’t help but feel a sense of unease as I delve deeper into the recent events at WazirX. The news of Bitcoin’s trading pairs with the Indian rupee plummeting and the massive $235 million hack on this platform has left me concerned.
As a crypto investor, I’ve noticed a significant drop in Bitcoin‘s value when measured against the Indian rupee. The decline is alarming, with over $100 million worth of transactions taking place. Unfortunately, the situation worsened for Shiba Inu (SHIB) holders as around $100 million in coins were reportedly stolen from the WazirX exchange. The value of SHIB has taken a hit due to this unfortunate incident and market volatility.
It’s important to acknowledge the truth: in the crypto sphere, hacks are unfortunately commonplace. Criminals uncover weaknesses in security systems at an unsettling rate, making off with vast amounts of money.
Recently, daring heists targeting large-scale transactions through centralized exchanges have decreased in frequency. This trend is troubling given the latest developments at WazirX, which involve substantial monetary value.
India’s largest cryptocurrency platform asserts on its website that over 15 million people trust it. However, this trust comes at a cost of $235 million for the platform following a recent incident. This represents nearly half of the funds the exchange was holding at the time. If warning signals weren’t already raised, this substantial loss is cause for concern.
In a worrying development that spooked customers, WazirX confirmed what happened on X:
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) July 18, 2024
But this is an attack that’s already had multiple knock-on effects, some of them pretty unexpected.
As a researcher studying the recent cryptocurrency theft, I’ve discovered that a significant portion of the stolen crypto was represented by two specific digital currencies: Shiba Inu and Ether.
As a researcher, I’ve come across estimates indicating that approximately $100 million worth of SHIB has been taken from its holders and is currently being sold off on Uniswap at an aggressive pace. Additionally, around $52 million in Ethereum (ETH) is also unaccounted for. However, given Ethereum’s position as the world’s second-largest cryptocurrency with ample liquidity and a significant buzz surrounding the potential approval of ETFs in the U.S., it is better equipped to handle the selling pressure compared to SHIB.
According to data from CoinMarketCap, SHIB has experienced significant losses over the past 24 hours, shedding approximately 8.35% of its value. In comparison, Ethereum (ETH) has only declined by 0.38% during the same period.
Arkham Intelligence, a renowned blockchain analysis firm, subsequently verified that the entire Shiba Inu token haul had been transferred out. They announced this development on platform X.
At the time of writing, they continue to hold 43,800 ETH as well as just 52 cents of MATIC.
The exploit has caused significant damage to trading relationships between major cryptocurrencies and the rupee. In US dollar terms, Bitcoin experienced a typical decline of 0.83% over the last 24 hours. However, in India – home to the world’s largest digital asset user base – Bitcoin plummeted dramatically.
As I pen down these words, Bitcoin was valued at approximately 357,000 USD or 4.84 million INR on this specific exchange. This represents a decrease of around 9.2% in comparison to the pricing on US markets. The sense of urgency is palpable.
Currently, investigators are meticulously trying to reconstruct the sequence of events. Mudit Gupta, Polygon Labs’ chief information security officer, posits that this was a carefully planned and executed cyberattack.
Over $230 million USD (2,000 crores INR) was stolen from WazirX after their multisig wallet security was breached. The thieves have been meticulously planning and executing this heist for at least eight days prior. Given the methodical nature of the attack, there are strong suspicions pointing towards North Korea as the likely perpetrators.
— Mudit Gupta (@Mudit__Gupta) July 18, 2024
The experts cautioned that there’s a significant possibility of only a partial restoration, with a minimal likelihood of full recuperation for WazirX users, implying potential financial losses.
Currently, the well-known cryptocurrency investigator ZachXBT has stated that the characteristics of this latest hack bear similarities to those of the Lazarus Group — an alleged cybercrime organization believed to be linked to the North Korean government, aiming to bypass international economic sanctions.
ZachXBT has been rewarded handsomely by Arkham for providing indisputable proof that the exploiter utilized a deposit address linked to KYC (Know Your Customer) verification to collect funds from WazirX.
What next?
Exchange hacks cause huge reputational damage — shaking the confidence of customers in the process.
In India, the WazirX incident might prompt the government to impose stricter regulations on cryptocurrencies, given its previously unfavorable stance towards them.
Prior to this vulnerability being discovered, taxes on crypto transaction profits reached a steep 30% – comparable to winnings from gambling. This stringent taxation was mainly due to concerns that such transactions might threaten “economic and financial stability” at large. India’s newly re-elected Prime Minister, Narendra Modi, has also expressed concern over digital assets potentially having a negative impact on the younger generation.
Customers of WazirX are equally justified in feeling frustrated as they attempt to receive responses from the support team.
I’ve been waiting on the phone with Wazirx for more than an hour at this point.
— Hugo Martingale (@HugoMartingale) July 18, 2024
During this period, competing crypto exchanges located in India are actively reassuring their clients that their financial resources are secure. This can be seen as an attempt to lure some customers away from WazirX.
The dust is yet to settle from this latest exploit, but the consequences will be severe.
Read More
Sorry. No data so far.
2024-07-18 22:26