- WazirX has suspended trading after a cyber attack resulted in a $230 million loss.
- The breach compromised one of the exchange’s multi-signature wallets.
- WazirX offers a $23 million bounty for help in recovering the stolen assets.
WazirX, one of India’s leading cryptocurrency exchanges, has temporarily halted all trading activities after suffering a massive security breach.
The Mumbai-based exchange disclosed that it lost about $230 million, nearly half of its reserves, due to the cyber attack.
This incident has severely affected WazirX’s ability to maintain a crucial 1:1 collateral ratio with its assets, raising significant concerns about its reserve adequacy and customer reimbursement capabilities.
Understanding the Breach and Its Impact
The security breach occurred when an attacker gained access to one of WazirX’s multi-signature wallets, which held crypto assets worth hundreds of millions of dollars.
This wallet was secured by six signatories, five of whom were WazirX team members. The attack was facilitated by a discrepancy between data displayed on Liminal’s interface and the actual transaction contents.
In response to the breach, WazirX suspended customer withdrawals earlier in the week. The exchange’s quick decision to halt trading activities aims to prevent further losses and mitigate the impact on its users.
WazirX’s Response and Bounty Program
In an effort to recover the stolen assets, WazirX has launched a bounty program, offering up to $23 million to anyone who can assist in retrieving the funds.
This significant bounty reflects the urgent need for recovery and the importance of maintaining customer trust.
The breach, described as a “force majeure event” by WazirX, has brought to light the vulnerabilities within cryptocurrency exchanges and the critical need for robust security measures.
The exchange reported holdings of approximately $500 million in its June proof-of-reserves disclosure, highlighting the magnitude of the $230 million loss.
Investigation and External Analysis
Elliptic, a risk-management platform, analyzed the breach and found links between the attacker and North Korea.
This finding underscores the growing threat of sophisticated cyber attacks targeting financial institutions worldwide.
Despite the breach, Indian cryptocurrency exchanges CoinSwitch and CoinDCX, which collaborate with WazirX for some services, have stated that their customers have not been impacted.
This assurance is crucial for maintaining confidence in the broader Indian cryptocurrency market.
