WazirX has surprised its users by starting the second phase of its fiat currency withdrawal process well before the initial target date of Sept. 9. This move comes as a result of a major security breach that rocked the exchange, leading to the loss of over $230 million in user assets. CEO Nishal Shetty took to social media to announce this development, highlighting the exchange’s efforts to restore access to customer funds. Currently, users are allowed to withdraw up to 66% of the total INR amount deposited on the platform, with the remaining funds set to be unlocked at a later date.
Security Breach Aftermath
The security breach in July had severe repercussions for WazirX, where a hacker exploited a vulnerability in one of its multisig wallets, causing significant losses. The stolen assets included $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH), forcing the exchange to halt its operations and initiate a restructuring process. Legal advisers have painted a grim picture for affected users, indicating a best-case scenario of recovering only 55-57% of their lost funds. While the restructuring aims to address these liabilities, uncertainty still looms large over the recovery process.
The Hacker’s Movements
In a parallel development, the hacker responsible for the breach made a significant move by transferring the stolen Ether through the crypto mixer Tornado Cash on Sept. 2. This action involved around $6.5 million worth of Ether in 16 different transactions on the Ethereum network, marking a crucial phase in the ongoing investigation. The hacker’s address, holding more than $155 million in various tokens, had not utilized Tornado Cash before, signifying a shift in tactics. The attack on WazirX is suspected to be the handiwork of the North Korean hacking group Lazarus, known for its money laundering operations totaling over $1 billion.
The fallout of WazirX’s security breach has exposed the vulnerabilities in its system, leaving users grappling with the loss of their assets. The early fiat currency withdrawal process offers a glimmer of hope, but the road to recovery appears long and uncertain. As the investigation unfolds and the hacker’s movements are tracked, the exchange faces an uphill battle to restore trust and make its users whole once again. The repercussions of such breaches go beyond financial losses, underscoring the critical need for robust security measures in the cryptocurrency space.
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