WazirX has initiated the second phase of their fiat currency withdrawal process earlier than expected, signaling potential challenges that the exchange is currently facing. This decision was made amidst the aftermath of a significant security breach that resulted in the theft of millions of dollars in user assets.
CEO Nishal Shetty took to social media to provide an update on the situation, emphasizing the exchange’s commitment to restoring access to customer funds. As of now, users are allowed to withdraw up to 66% of their total deposited INR amount on the platform, with the remainder to be accessible at a later date.
The security breach that occurred in July led to a hacker exploiting a vulnerability in WazirX’s multisig wallets, resulting in the loss of substantial assets, including $100 million in Shiba Inu and $52 million in Ethereum. This forced the exchange to halt its operations and commence a restructuring process to mitigate the impact on users. Legal advisers have expressed doubts about the full recovery of lost funds, with a projected return of only 55% to 57% of the original assets.
In a recent development, the hacker responsible for the breach has been observed moving stolen Ether through a crypto mixer called Tornado Cash. This occurrence, involving nearly $6.5 million worth of Ether, showcases the ongoing challenges in tracking and retrieving stolen assets. The hacker’s address, holding over $155 million in various tokens, has not previously engaged with Tornado Cash, marking a significant shift in the investigation.
The attack on WazirX is suspected to be the work of the North Korean hacking group, Lazarus, renowned for their laundering of stolen funds exceeding $1 billion. This group has evaded international sanctions and is known for executing sophisticated cyber operations. As WazirX navigates through the aftermath of the security breach, the implications of this incident reach far beyond the exchange itself.
WazirX’s fiat currency withdrawal process and the subsequent security breach highlight the vulnerability of cryptocurrency exchanges to hacking and cyber threats. The ongoing efforts to recover lost funds and address user concerns underscore the complexities faced by platforms operating in the digital asset space. As the industry continues to evolve, ensuring robust security measures and proactive risk management strategies are essential to safeguarding user assets and maintaining trust within the crypto community.
