As a seasoned crypto investor with a few scars and battle stories under my belt, the recent turn of events at WazirX has been a rollercoaster ride that I wouldn’t wish upon anyone. After the staggering $230 million hack in July, I’ve found myself on tenterhooks, waiting for updates from the Indian exchange.
In July, the Indian cryptocurrency platform WazirX, which recently experienced a theft of approximately $230 million, announced that they will be transferring user funds into newly established multi-signature wallets. Additionally, they have decided to terminate their partnership with the crypto custody provider, Liminal.
On August 14th, in a recent update posted on their platform, the exchange announced that they were transferring the rest of their assets from Liminal to fresh multi-signature wallets to enhance the highest level of safety.
Hello Everyone! Let’s keep you updated on the steps we’re taking to secure your crypto assets within our exchange.
Currently, we are transferring the remaining funds kept with Liminal into new multi-signature wallets for enhanced safety and protection of your assets.
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 14, 2024
Following the incident, the Mumbai exchange detailed in their post-mortem report that any transaction on their multi-signature wallets required approval from three of their team members as well as one signature from the crypto custody service, Liminal.
In essence, it appears that the cybercriminals exploited a mismatch found between the transaction details shown on Liminal’s platform and the actual transaction data. This discrepancy enabled them to seize control of the digital wallet, effectively gaining unauthorized access.
After executing their attack, the perpetrators made off with over $230 million worth of diverse cryptocurrencies, such as Ethereum (ETH), Shiba Inu (SHIB), Polygon (MATIC), and Pepe (PEPE). They exchanged the smaller tokens into ETH, increasing their total loot to approximately 59,000 Ether.
As a crypto investor, I found myself in a situation where an attack on the exchange disrupted their capacity to keep each asset matched with an equal amount of collateral. Consequently, they had no choice but to temporarily pause all cryptocurrency and fiat withdrawals.
As a researcher, I can confirm that I’ve been assured by Liminal that their infrastructure remains secure, and all the wallets under their management, encompassing those associated with WazirX, are safeguarded effectively.
In its recent update, WazirX continues to assert that Liminal’s systems and interface were breached during the July 18 incident, leading them to take this cautious step. They haven’t provided a specific deadline for when the wallet migration will be finished, only mentioning they will share a list of all new addresses once the process is completed.
In response to the security breach, WazirX proposed a “shared-risk approach” where users could withdraw 55% of their holdings, while the platform retained 45% in USDT (Tether) equivalents for potential future losses.
Nevertheless, the idea faced broad criticism, as users alleged that the platform was attempting to dodge complete accountability for losses due to the hack. Consequently, WazirX had no choice but to reconsider their strategy, requesting additional time to devise a solution instead.
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2024-08-15 12:01