In a major update following a $230 million cyberattack, WazirX, one of India’s leading cryptocurrency exchanges, has announced that its systems were not compromised during the breach. A forensic investigation conducted by Mandiant Solutions, a subsidiary of Google, concluded that the security lapse was likely due to vulnerabilities in the infrastructure of Liminal, WazirX’s former custody partner.
WazirX Vindicated in $230M Hack Investigation
Last month, WazirX experienced a massive security breach that resulted in the loss of nearly half of its holding assets. The attack specifically targeted a multi-signature (multisig) wallet, which is designed to require multiple private keys for transaction authorization. This particular wallet had six signatories: five from WazirX and one from Liminal. Despite the complexity of the security measures, the breach occurred, raising concerns about the integrity of WazirX’s internal systems.
However, WazirX’s forensic investigation revealed no evidence of compromise on the three laptops used for signing transactions. According to the exchange, “All transactions from the multisig wallet required approval from three WazirX members, followed by final authorization from Liminal.” The findings suggest that the security flaw lay within Liminal’s system, absolving WazirX of internal failure. The exchange stated, “The findings largely indicate that the issue leading to the cyberattack originated from Liminal.”
WazirX’s Response and Recovery Efforts
In the wake of the hack, WazirX has taken several measures to recover from the incident and reassure its users. The exchange has expressed full confidence in the forensic findings and has pledged to cooperate fully with the ongoing investigation.
A spokesperson for WazirX stated, “We have full faith in the investigating agency and shall cooperate with them to the fullest extent. We are actively working on recovering the stolen funds and are hopeful that those responsible will be brought to justice.”
To further mitigate the impact of the hack, WazirX has rolled out several recovery strategies. The exchange is considering launching a Bounty Program, offering rewards of up to $10,000 in USDT for information leading to the recovery of the stolen assets. Additionally, WazirX conducted a user poll to gather opinions on the next steps in the recovery process.
WazirX has also reached out to industry peers and rivals for support, even exploring the possibility of a buyout. The exchange had previously approached its former partner, Binance, which had controlled a significant portion of WazirX’s revenue and WRX tokens valued at $80 million.
Regulatory and Industry Engagement
WazirX has been proactive in engaging with regulatory bodies to address the breach’s aftermath. The exchange has collaborated with India’s Financial Intelligence Unit (FIU) and the Indian Computer Emergency Response Team (CERT) to investigate and resolve the incident.
Initially, WazirX proposed a controversial “55/45 approach” to mitigate customer losses, which allowed users to access 55% of their portfolio tokens, while the remaining 45% would be converted to USDT and locked until the funds were recovered. However, due to customer backlash, this plan was ultimately scrapped.
In the latest updates, WazirX has completed the restoration of balances by reversing all trades between July 18 and July 21, a period during which unauthorized trades were not blocked. Additionally, the exchange has severed ties with Liminal as its custody partner, further distancing itself from the security lapse that led to the hack.