Recently, WazirX embarked on the second phase of its fiat currency withdrawal process ahead of schedule, catching many users by surprise. The initial date for the process to commence was set for September 9th, but it began on September 3rd. This unexpected move comes in the aftermath of a significant security breach that resulted in the theft of over $230 million in user assets. CEO Nishal Shetty took to social media to share this update, emphasizing the exchange’s commitment to recovering customer funds. Presently, users have the ability to withdraw up to 66% of the total INR amount deposited on the platform, with the promise of unlocking the remaining funds at a later date.
Following a security breach in July, where a hacker exploited a vulnerability in one of WazirX’s multisig wallets, causing substantial losses, the exchange has been dealing with the aftermath. The hacker made away with a staggering $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH). As a result, WazirX had to halt its operations and commence a restructuring process to attempt to reimburse affected users. Legal experts have expressed doubt about the possibility of customers retrieving the full extent of their lost assets, with a projected best-case scenario indicating a return of only 55% to 57% of the initial funds. While efforts are being made to address these liabilities through the restructuring, uncertainty looms large for impacted users.
In a troubling development, the individual behind the breach was observed transferring the stolen Ether through crypto mixer Tornado Cash on September 2nd, as revealed by data from Arkham Intelligence. Approximately $6.5 million worth of Ether was dispersed across 16 transactions on the Ethereum network. Notably, this move marked the first instance of the hacker utilizing Tornado Cash, signaling a significant turn in the ongoing investigation. The perpetrator, owning assets exceeding $155 million in various tokens, is suspected of being linked to the North Korean hacking group Lazarus, infamous for laundering more than $1 billion in illicitly obtained funds. Lazarus has evaded international sanctions and gained notoriety for its highly sophisticated cyber activities.
The recent occurrences at WazirX underscore the critical importance of robust security measures within the cryptocurrency industry. The exchange’s endeavors to navigate the aftermath of the security breach and safeguard user assets serve as a cautionary tale for all participants in the digital asset space. Vigilance, transparency, and proactive steps are imperative to mitigate risks and uphold the integrity of the ecosystem.
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