WazirX, one of India’s largest cryptocurrency exchanges, has hit a major roadblock. The exchange has temporarily suspended all trading activities after suffering a massive security breach that resulted in the loss of about $230 million. This amount is nearly half of WazirX’s reserves, a staggering figure that has caused quite a stir in the crypto community.
The Mumbai-based exchange revealed that the cyber attack severely disrupted its ability to maintain the crucial 1:1 collateral ratio with assets. This is a big deal because it raises questions about WazirX’s reserves’ adequacy and whether they can fully reimburse their customers. Imagine trusting a platform with your investments only to find out they can’t guarantee their security.
Earlier in the week, WazirX had to suspend customer withdrawals after an attacker accessed one of their multi-signature wallets. This wallet stored crypto assets worth hundreds of millions of dollars and was protected by six signatories, five of whom were part of the WazirX team. The attack was traced back to a discrepancy between the data displayed on Liminal’s interface and the actual transaction contents, which the firm pointed out as the breach’s origin.
To combat the crisis, WazirX has announced a bounty program offering up to $23 million for anyone who can help recover the stolen assets. This bounty is a clear sign of the gravity of the situation and the exchange’s desperate need to recover the lost funds.
Interestingly, risk-management platform Elliptic has linked the attacker to North Korea, adding another layer of complexity to the situation. With such a significant amount of assets missing, it’s a challenging time for WazirX, especially considering they reported holdings of around $500 million in their June proof-of-reserves disclosure.
Despite the severity of the breach, other Indian exchanges like CoinSwitch and CoinDCX, which collaborate with WazirX for some services, have assured their customers that they were not affected by the attack. This assurance brings some relief, but the overall impact on the crypto market in India remains to be seen.
This incident is a stark reminder of the vulnerabilities in the crypto world and the importance of robust security measures. For WazirX, this is a force majeure event, an unexpected catastrophe that will test their resilience and commitment to their customers.
