WazirX Suffers $230 Million Hack, Suspends Withdrawals Amid Investigation

Indian cryptocurrency exchange WazirX has fallen victim to a major security breach, resulting in the loss of approximately $230 million in digital assets. The incident, which occurred on July 18, 2024, has led the exchange to temporarily suspend both cryptocurrency and rupee withdrawals as it investigates the attack.

According to WazirX’s preliminary report, the cyber attack targeted one of its multisig wallets that utilized Liminal’s digital asset custody and wallet infrastructure. The breach appears to have exploited a discrepancy between the data displayed on Liminal’s interface and the actual transaction contents, potentially allowing attackers to replace the payload and transfer wallet control.

The compromised funds include a diverse range of cryptocurrencies, with significant amounts of Shiba Inu (SHIB), Ethereum (ETH), Polygon (MATIC), and Tether (USDT) among the affected assets. Blockchain data suggests that the attackers are attempting to offload the stolen funds through decentralized exchanges like Uniswap.

This security breach has had immediate repercussions on the crypto market. WazirX’s native token, WRX, has experienced a sharp decline of approximately 15% in value. Additionally, many cryptocurrencies, including Bitcoin and USDT, are now trading at significant discounts on the WazirX platform compared to other exchanges, likely due to panic selling by investors.

The incident is particularly concerning as it represents nearly half of WazirX’s reported reserves, based on their June proof-of-reserves disclosure. The exchange has stated that it is “leaving no stone unturned” in its efforts to locate and recover the stolen funds, including blocking certain deposits and reaching out to relevant wallet addresses.

This attack adds to a series of high-profile crypto exchange hacks that have plagued the industry in recent years, underscoring the ongoing security challenges faced by digital asset platforms. It also comes as a significant setback for WazirX, which had recently separated from Binance following a public dispute in 2022.

As the situation unfolds, WazirX has promised to keep its users updated on the progress of the investigation and recovery efforts. The incident serves as a stark reminder of the risks associated with cryptocurrency investments and the importance of robust security measures in the rapidly evolving digital asset landscape.