Recently, WazirX announced that it has initiated the second phase of its fiat currency withdrawal process ahead of the previously scheduled date of Sept. 9. This move comes in the aftermath of a major security breach that resulted in the theft of over $230 million in user assets. CEO Nishal Shetty shared the update on social media, emphasizing the exchange’s efforts to restore access to customer funds. Currently, users have the option to withdraw up to 66% of the total INR amount deposited on the platform, with plans for unlocking the remaining amount at a later time.
Following the security breach in July, where a hacker exploited a vulnerability in one of WazirX’s multisig wallets, the exchange has been grappling with significant consequences. Notably, the breach led to the loss of substantial assets, including $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH). Consequently, WazirX had to halt its operations and undergo a restructuring process to mitigate the impact on users. Legal advisers have cautioned that customers are unlikely to recover the entire amount of their lost funds. The most optimistic scenario projects a return of only 55% to 57% of the initial assets.
In a parallel development, the hacker behind the breach has begun moving the stolen Ether through a crypto mixer called Tornado Cash. This recent activity, involving nearly $6.5 million worth of Ether in 16 transactions on the Ethereum network, sheds light on the ongoing investigation. Notably, the hacker’s address, holding over $155 million in various tokens, had not previously used Tornado Cash, marking a significant turn in the case. Reports suggest that the attack on WazirX could be linked to the North Korean hacking group Lazarus, notorious for laundering more than $1 billion in stolen funds. The group’s advanced cyber operations have made it a prime target for international sanctions.
As WazirX navigates the aftermath of the security breach and works towards restoring customer trust, the road ahead remains uncertain for many impacted users. The restructuring process is aimed at addressing the liabilities incurred by the exchange, but the recovery of lost assets is expected to be partial at best. With ongoing investigations and developments, the implications of the breach could have far-reaching consequences for the cryptocurrency community as a whole.
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