WazirX, India's largest cryptocurrency exchange by volume, temporarily paused INR and crypto withdrawals on Thursday following a significant security breach. According to Web3 security firm Cyvers, approximately $234.9 million in funds were transferred to a new address.
WazirX acknowledged the breach, stating, "Our team is actively investigating the incident." The exchange confirmed that one of its multi-signature wallets had been compromised.
Liminal Custody, a crypto storage provider, clarified that the compromised wallet was a self-custody multi-signature smart contract wallet created outside its ecosystem. "Liminal's platform remains secure, and all WazirX wallets created on our platform are protected. The malicious transactions originated outside of the Liminal platform," the company stated.
This incident has raised concerns among WazirX users about the safety of their funds on the exchange. The hack is a significant setback for India's recovering crypto industry.
Neeraj Khandelwal, co-founder of CoinDCX, expressed sympathy, saying, "Even though WazirX is our competitor, this incident is unfortunate for the Indian web3 ecosystem."
Krishnendu Chatterjee, co-founder and CEO of A2ZCrypto, emphasized the need for regulatory intervention. "The Indian government should urgently regulate crypto, separating the roles of exchanges and custodians. With proper custody and insurance, such scenarios might be averted, ensuring investor protection," he said.
Edul Patel, CEO of Mudrex, highlighted the importance of continuous monitoring and robust compliance frameworks to protect investors and maintain the crypto ecosystem's integrity.
As of June 10, 2024, WazirX's total holdings stood at Rs 4,203.88 crore, a 79% increase since January 2023. With over 16 million users, WazirX recently released its Proof of Reserves for June 2024, facilitating transactions across more than 350 cryptocurrencies and 700 market pairs.
A report by blockchain research firm TRM's threat intelligence indicated that by June 24, 2024, hackers had stolen $1.38 billion, up from $657 million the previous year. In May, Japanese cryptocurrency exchange DMM Bitcoin suffered a theft of over 4,500 BTC, valued at over $300 million at the time.
Elliptic's analysis confirmed that around $235 million in crypto assets were lost in the WazirX breach. The stolen assets included approximately $96.7 million in Shiba Inu, $52.6 million in Ether, $11 million in Matic, and $7.6 million in Pepe. On-chain analysis suggests the hack was conducted by hackers affiliated with North Korea. Elliptic has added the thief's address to its system to alert clients if they receive any of the stolen funds. The hacker responsible for the $235 million exploit on India’s WazirX exchange has converted the majority of the stolen assets into Ether. Blockchain analytics firm Lookonchain reported this on X (formerly Twitter) on Thursday night.
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