WazirX Pauses Withdrawals After $235M Hack

WazirX, one of India’s top cryptocurrency exchanges, has temporarily paused Indian Rupee and crypto withdrawals following a significant security breach. Are your assets safe? The exchange acknowledged the incident in a tweet and announced an active investigation. They are addressing the issue.

The breach resulted in nearly half of WazirX’s reserves being wiped out. An estimated $235 million is stolen. According to blockchain analytics firm Spot On Chain, the hacker converted approximately $149 million of altcoins. That includes $90.2 million in Shiba Inu (SHIB), $10.2 million in Polygon (MATIC) and $7.5 million in Pepe (PEPE) into Ether (ETH). This conversion likely aims to avoid asset freezing. Ether is more liquid and less prone to blacklisting.

Why Ether? Blockchain security firm, PeckShield explains that swapping to Ether quickly helps secure funds before authorities or token issuers can take preventative measures. Additionally, Ether is easier to launder. This occurs through cryptocurrency exchanges and mixer protocols making it a preferred choice for bad actors.

The hacker still holds around $12 million worth of Chromia (CHR), Celer Network (CELR), Frontier (FRONT), and Ooki (OOKI) tokens according to Spot On Chain. In response to the breach, WazirX suspended withdrawals on July 18. They communicated their efforts to recover the stolen funds. “We have already blocked a few deposits. We contacted concerned wallets for recovery,” the exchange posted on X.

“I identified a KYC exchange deposit made by the WazirX hacker….Unfortunately this is probably not super helpful as KYC verified accounts can be easily purchased online for any exchange.” - ZachXBT

Blockchain forensics firm Elliptic suspects North Korean hackers were behind the attack. They cited specific patterns and techniques observed during the breach. Cyvers a Web3 security firm, detected multiple suspicious transactions involving WazirX’s Safe Multisig wallet on Ethereum. It is believed that $234.9 million of funds were moved to a new address with each transaction’s caller funded by Tornado Cash. Tornado Cash is a decentralized protocol for private transactions.

WazirX, owned by global cryptocurrency exchange Binance has promised to keep users updated as the investigation progresses. How long will the withdrawal suspension last? Only time will tell. The exchange works to address the security breach and protect user assets.

Conclusion: The WazirX hack highlights ongoing vulnerabilities in the crypto space. It emphasizes the need for robust security measures. As the investigation continues the crypto community watches closely. They hope for swift resolution and recovery of stolen funds.