WazirX Finally Ends Terms With Liminal Custody, Moves Funds

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As a seasoned researcher with years of experience in the complex world of cryptocurrencies and digital assets, I find myself intrigued by this developing saga between WazirX and Liminal Custody. The recent hack on WazirX, resulting in a staggering loss of $230 Million (Rs 2000 crore), has undoubtedly shaken the confidence of many investors.

Approximately a month following the massive crypto heist worth approximately 2000 crores Indian rupees, the cryptocurrency trading platform WazirX terminated its partnership with Liminal Custody – a digital asset custody service provider responsible for securing the compromised multi-signature wallet.

Moreover, WazirX revealed on Wednesday their decision to transfer any remaining funds they had with Liminal into new multi-signature wallets as a means to enhance the “ultimate safety” of these assets. Notably, WazirX continues to assert that their platform and interfaces remained secure throughout the incident, and it was actually Liminal Custody that experienced a breach during the cyber attack on July 18.

“WazirX stated that they are transferring the remaining funds from Liminal to secure multi-signature wallets. This move is crucial for the highest level of asset safety following recent occurrences. Although their own interface and systems seem unaffected, it’s uncertain if the custodian’s interface remains secure post the July 18th event, leading to this precautionary measure.”

The latest statement from WazirX did not manage to calm the worries of frustrated investors, who are urgently requesting the release of their frozen assets.

We appreciate your thoughtfulness, but we prefer not to receive a daily love letter. Instead, could you please facilitate the necessary transaction for us to get our money refunded? Thank you.

— Mahi (@mahi_tst) August 14, 2024

What Happened between WazirX and Liminal Custody on July 18?

On July 18, hackers managed to infiltrate a multisignature (multisig) wallet belonging to WazirX, leading to a massive theft of cryptocurrencies valued at approximately $230 Million (Rs 2000 crore). This represented roughly 45% of the total funds stored within this single multisig wallet, which held all of WazirX’s assets. WazirX stated that there were four separate parties responsible for safeguarding these funds: three from the exchange itself and one with Liminal Custody.

Following the incident, WazirX attributed the suspected hack of their multi-signature wallet to Liminal Custody, who have consistently refuted any involvement in wrongdoings. To this day, WazirX continues to assert that its user interface was not breached during the attack.

The Strange Connection of WazirX’s Nischal Shetty and Liminal’s Mahin Gupta

As a research analyst, I found it intriguing to learn from The Crypto Times on Monday that Nischal Shetty, co-founder of WazirX, is also the co-founder of another Indian crypto exchange, Pi42. Notably, Mahin Gupta, founder of Liminal Custody, serves as an advisor and investor for Pi42. The investors affected by WazirX have highlighted the relationship between Gupta and Shetty and expressed their concerns over the way both WazirX and Liminal have been passing the blame back and forth, despite their close ties.

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2024-08-14 13:40