WazirX Exchange Gets ‘Clean Chit’, Blames Liminal For $230M Hack

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As a seasoned analyst with years of experience in the digital asset market, I have seen my fair share of cybersecurity incidents and hacks. In the case of WazirX, while it is reassuring to hear that their systems were not compromised, the fact remains that they suffered a significant loss due to a multisig wallet breach.

In a recent update on the ongoing hack investigation, the WazirX exchange has declared that its systems and laptops were not compromised during the $230 million cyberattack. This assurance follows a thorough forensic investigation by Mandiant Solutions, a Google subsidiary. The report concluded that the issue likely stemmed from its former infrastructure and custody partner, Liminal.

WazirX Exchange Receives Clean Chit After Forensic Probe

Last month, WazirX, a prominent Indian cryptocurrency exchange, suffered a substantial security incident that led to the loss of approximately 45% of its asset holdings. This breach focused on a sophisticated multi-signature wallet, a type of crypto wallet that demands several private keys to validate transactions. The wallet under attack had six authorized parties: five from WazirX and one from Liminal.

As per the exchange’s guidelines, all transactions originating from the Multisig wallet necessitated approval from three individuals at WazirX. This was followed by a final approval from Liminal. Contrary to this, the forensic report concluded that no signs of compromise were found on the three computers used for transaction signing.

According to a MoneyControl report, WazirX has suggested that Mandiant Solutions’ findings imply that the root cause of the hack was not internal flaws within WazirX, but rather a security problem with Liminal.

1) WazirX Exchange is completely confident in the ongoing investigation and pledges full cooperation. Furthermore, a representative of the platform stated their stance on the matter.

As a dedicated cryptocurrency investor, I firmly trust the investigative authorities to handle this situation diligently. I am committed to providing all necessary assistance to help them in their investigation to the fullest extent possible. Simultaneously, I am proactively working towards recovering the funds that were stolen. I remain optimistic that those responsible for this incident will be identified and brought to justice.

Regarding the recent hack, WazirX has put into action various recovery plans. They are investigating possibilities such as a Bounty Program that offers rewards valued at up to $10,000 in USDT. Additionally, they have conducted a poll to gather user feedback on future actions.

Beyond this, the Indian cryptocurrency platform is reaching out to competitors and fellow players in the industry for assistance or possible acquisitions. Previously, the WazirX exchange attempted negotiations with its previous partner, Binance. Notably, Binance previously held a substantial share of their revenue and owned $80 million worth of WRX tokens.

Latest Updates By The Exchange

The crypto platform has also reached out to both the Financial Intelligence Unit of India (FIU) and the Indian Computer Emergency Response Team (CERT), aiming to handle the consequences of the security incident. In their reaction, WazirX originally suggested a “55/45 plan” as a means to minimize user losses.

As a crypto investor, I found myself considering an option that let me access and trade 55% of my portfolio tokens, while the other 45% would be transformed into USDT and kept secure until recovery funds were available. However, this idea met with considerable resistance from users and ultimately was abandoned.

Following the unfortunate hack incident, I’ve stepped down from my role as a custody partner for the exchange. Subsequently, we’ve successfully restored account balances by reversing all transactions made between July 18 and July 21. This measure was taken due to our inability to prevent unauthorized trades during that specific period.

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2024-08-19 14:56