Security Breach at WazirX: $230 Million Lost in Crypto Assets

WazirX, one of India’s leading cryptocurrency exchanges, was hit by a major security breach on Thursday, resulting in the loss of $230 million, nearly half of its reserves. The Mumbai-based firm announced that withdrawals were halted after a “force majeure event” affected one of its multisig wallets.

A multisig wallet requires multiple private keys for authentication, and WazirX revealed that five out of six signatories for the wallet were from its own team. Liminal, a wallet infrastructure firm, stated that their preliminary investigation indicated a wallet created outside their ecosystem had been compromised.

According to WazirX, the cyber attack was a result of a discrepancy between the data displayed on Liminal’s interface and the actual transaction contents. More than 200 cryptocurrencies, including a significant amount of SHIB tokens, Ethereum tokens, Matic tokens, Pepe tokens, USDT, and Gala tokens, were reported as “stolen” from the platform by Lookchain, a third-party blockchain explorer.

The attackers are believed to be attempting to offload the assets using the decentralized exchange Uniswap, with reports from risk-management platform Elliptic suggesting they have ties to North Korea. This incident is a significant blow to WazirX, which had reported holdings of around $500 million in its June proof-of-reserves disclosure.

In response to the breach, other leading Indian crypto exchanges like CoinSwitch and CoinDCX reassured their customers that their funds were secure and unaffected. Sumit Gupta, co-founder and CEO of CoinDCX, emphasized the robust security of their wallets, while Ashish Singhal, co-founder and CEO of PeepalCo, advised caution during potential market volatility.

This security breach is the latest setback for WazirX, which had separated from Binance in early 2023 following a public fallout in 2022 over ownership disputes. WazirX stated that they are working tirelessly to locate and recover the lost funds, blocking deposits and seeking assistance from relevant parties.

The story continues to develop, with updates being provided by WazirX as they confirm the loss of crypto assets in the breach. The cryptocurrency community will be closely monitoring the situation as WazirX navigates this challenging period.