WazirX is a cryptocurrency exchange operating out of India however the platform recently underwent a hack attack. The hackers targeted a multisig wallet associated with the trading platform.
The funds from this wallet were stolen and converted into Ethereum. The details of the incident have been shared by a cybersecurity firm Cyvers.
WazirX’s Safe Multisig Wallet
This wallet noted that the wallet funds were drained after a number of suspicious transactions. The updates posted on social media platform indicated that the Safe multisig wallet in question was moved to a new address. All of the transfer transactions were sponsored by Tornado Cash, a decentralized protocol for private transactions.
Some of the tokens moved to the new address included Tether, Pepe, and Gala. However, the attackers converted all tokens into Ethereum. A Telegram post on the subject by analyst ZachXBT indicated that a wallet associated with the primary attacker contained $104 million in funds that are speculated to be sold.
This wallet has $100 million in Shiba Inu, $52 million in Ethereum, and $11 million in Polygon, $2.8 million in Chainlink, $3.2 million Fantom, and more tokens.
WazirX Administration Halts Withdrawal Feature
As an immediate response to the attack, the management of the trading platform halted the withdrawal service on a temporary basis. The platform notified investors in a social media post nothing that they were investigating the event in a proactive manner. The customers were unable to withdraw cryptocurrencies or INR funds until further notice.
WazirX also talked about the re-assured investors about posting updates of the incident as it happens. As of 21st March, the Financial Intelligence Unit (FIU) and Finance Ministry of India have issued compliance notices to a number of foreign crypto trading platforms operating in India including OKX. The notification sent to Indian OKX asked investors to shut down accounts and withdraw funds before 30th April.
The trading platform later notified investors that its services were banned in the region. Therefore, a number of foreign trading platforms operating in the region have negotiated with Indian regulators and campaigns for the regulatory framework.
A number of trading platforms have also folded operations during this time but considering the competition to retain operations in the lucrative region has been persistent.
WazirX Operates as a Local Indian Exchange Following Binance’s Departure
WazirX has continued to operate as a local Indian crypto trading platform since 2023. At the start of the previous year, Binance withdrew funds stored in Binance wallets as a final step to fold operations.
During the same time, Indian regulators alleged that WazirX was involved in $130 million money laundering. This allegation led to Binance distancing itself from the Indian exchange.
The platform was already having a dispute with WazirX operator Zanmai. After prompted from Binance to retract funds from Binance wallets, Zanmai kept the funds. In March, WazirX noted that the platform contained 90% of user reserves in Binance wallets.
In the international crypto timeline, a number of crypto exchanges issued proof-of-reserves in the pretext of the FTX demise.
WazirX has remained one of the largest trading platforms in India. However, after the exchange platform received a notification from the local regulatory agencies, Binance assisted regulators during the investigation process and removed the on-chain fund transfers. Since that time, WazirX has continued to operate as a local crypto trading platform.
Hackers moved another installment of $57 million in stolen funds while the platform increases the bounty reward.
Hackers sent 16350 ETH valued at around $57 million to a new wallet to neutralize the funds. This incident has been dubbed as one of the biggest attacks of 2024. To recover funds, WazirX has launched two bounty programs to incentivize on-chain investigators.
The first reward of up to 10,000 Tether is for investors who are able to provide intelligence that assists the administrators to freeze stolen funds. The second award is reserved for hackers who work with WazirX to recover stolen funds and keep 10% of the all recovered amount.
