WazirX, a prominent Indian cryptocurrency exchange, has been dealing with the aftermath of a major hack that occurred on July 18, 2024, leading to a staggering $230 million theft from the platform’s multi-signature wallet. This breach not only caused trading to be halted but also resulted in frozen withdrawals, significantly impacting the operational stability of WazirX. The exchange has been facing legal issues and ongoing investigations as it strives to recover from this massive cyber attack.
The hacker responsible for the WazirX breach recently made a bold move by transferring $6.5 million worth of stolen Ethereum (ETH) to Tornado Cash, a service known for obfuscating the origins of digital assets. This transfer coincided with the start of the second phase of Indian rupee (INR) withdrawals on WazirX, allowing eligible users to withdraw up to 66% of their INR balances.
The first phase of partial INR withdrawals commenced on August 26 and was originally planned to run until September 8. However, the exchange decided to expedite the process to provide users with quicker access to their funds. This staggered approach to restoring financial operations is part of WazirX’s strategy to recover from the hack and address the fallout from the attack.
Cyvers, a blockchain security firm, reported that the hacker moved 2,600 ETH, equivalent to $6.5 million, through Tornado Cash. This move underscores the sophisticated tactics employed by cybercriminals to evade detection and launder stolen funds. Tornado Cash, although sanctioned by the US government, has been instrumental in covering the tracks of illicit transactions, making it challenging for law enforcement to trace and recover stolen assets.
WazirX has been facing challenges in fully reinstating INR withdrawals due to the ongoing investigations and legal proceedings surrounding the hack. A portion of rupee-denominated balances still remains inaccessible as of late August, posing a considerable obstacle to the exchange’s efforts to restore normal operations. Additionally, reports suggest that the losses incurred from the hack may be socialized among users, potentially resulting in some individuals not receiving the full value of their cryptocurrency holdings.
Despite the hurdles, WazirX has been working diligently to address the aftermath of the hack and seek justice for affected users. The exchange has initiated legal proceedings in Singapore as part of its restructuring efforts, with a focus on collaborating with law enforcement agencies to mitigate the impact of the cyber attack. However, the road to recovery remains challenging, especially as WazirX faces a lawsuit from CoinSwitch for $9.7 million.
As the situation continues to evolve, the recovery of stolen funds and the broader implications for WazirX’s users remain key concerns. The exchange’s decision to accelerate the second phase of INR withdrawals underscores its commitment to providing users with access to their funds in a timely manner. By navigating the legal complexities and operational challenges stemming from the hack, WazirX aims to restore trust and stability to its platform while safeguarding the interests of its user base.
