WazirX, an Indian cryptocurrency exchange, has attributed a significant security breach to a data discrepancy with a custodial platform. However, prominent figures in the Indian crypto community are skeptical of this explanation.
A North Korea-linked hacker exploited WazirX, converting the majority of the $230 million stolen assets into ether (ETH), amounting to $200 million. This breach has severely impacted the exchange’s liquidity and the prices of listed tokens. The WRX token of WazirX has plunged by 40% in the past 24 hours.
The exploiter now holds over 59,097 ETH, valued at $200 million, along with another $15 million in various altcoins, as reported by blockchain tracker Lookonchain. Hackers typically convert stolen tokens to ETH to use mixing services like Tornado Cash, which obscure transaction history and facilitate money laundering.
As of Friday morning, almost all tokens listed on WazirX were trading at significant discounts compared to their global and local prices, indicating poor liquidity and intense selling pressure. The Bitcoin/rupee trading pair was down 22% in the past 24 hours, in stark contrast to a 2% decline on other local exchanges such as CoinDCX and Zebpay. The Shiba Inu/rupee pair dropped by 30%.
The security breach on Thursday targeted a multisig wallet, draining over $100 million in Shiba Inu (SHIB) and $52 million in ether, among other assets. These stolen funds represented over 45% of WazirX’s total reserves, as reported in June 2024, severely impacting user recovery prospects.
WazirX attributed the exploit to a mismatch between a digital interface and a major crypto wallet, despite having five signers from the exchange on the wallet storing user assets. “During the cyber attack, there was a mismatch between the information displayed on Liminal’s interface and what was actually signed,” the exchange explained. “We suspect the payload was replaced to transfer wallet control to an attacker.”
However, this explanation has not convinced everyone in the Indian crypto community. “Six people there, need four to verify, still hacked, and blame game,” tweeted Pankaj Tanwar, a well-known crypto YouTuber. “This mistake will damage #Crypto in India beyond imagination.” Another crypto commentator, @studybitcoin21, questioned the security and compliance practices of the exchange.
In response to the breach, WazirX has temporarily paused crypto and fiat withdrawals.
