WazirX Hack: Crypto exchange hits $230m cyber theft; North Korea suspected
WazirX Hack: Crypto exchange WazirX has admitted to a major security breach wherein the chalking up of more than $230 million (around Rs 1,924 crore) was compromised. The attack happened on Thursday 18 july, and with the first research, it seemed that North Korean hackers could be involved, related to Lazarus Group. Speaking of the circumstances of WazirX hack, Mudit Gupta, Polygon’s CISO said that the cyberattack can be attributed to North Korean hackers with 80 percent certainty.
Crossing of the industry has been the reaction of the Crypto Industry to WazirX Hack
The confirmation of the hack led to the loss of more than $230 million; the tie-up between WazirX &Liminal Custody Solutions signed in February 2023 is in question. WazirX provided the hackers with two signatures and Liminal one by allowing them to set up a multi-signature wallet for the stolen assets.
Some of the industry’s top stakeholders have reacted to the incident, this has stressed the importance of proper security measures. Arjun Vijay, co-founder and COO of Giottus crypto exchange, claimed that it is dangerous when the exchange has such a massive share of the total value in hot wallets. WazirX Hack : Disaster in the Making, Thoughts that Should have been Wiped Out By Regulation, Otherwise, we need to take a lesson from the 4Ps, to know that this disaster could have been averted by capping each wallet at $25 million or $50 million – Gaurav Arora, Founder of Spenny. He also expressed that Liminal lacked security measures to prevent fraudulent transactions, for instance, using manual review for large transactions.
Mudit Gupta from Polygon also mentioned that WazirX does not have actual security personnel as Coinbase has more than 200 employees working specifically in security and compliance. He especially emphasised the need of developing corporate procedures in signing and verifying activities, as well as having in-house security specialists to implement the finest measures.
The Events of the WazirX Hack
Below are the details that WazirX gave on how the hack happened. In a statement that was provided to Media, the company confirmed the loss but said the hack occurred in one of their multisig wallets that was run on Liminal’s digital asset management and wallet platform. The given wallet has six signatories, of which five belong to WazirX while another to Liminal. The problem identified during the cyberattack was that while performing the action on Liminal’s interface, signed values would differ from those signed, which implied that the payload was swapped for the provision of the attacker’s control over the wallet.
Even though Binance uses such precautions like Gnosis Safe multisig smart contract platform, and Liminal’s whitelisting policy, the Mumbai-based exchange was affected by the attack. All the withdrawal and deposit services on WazirX are still suspended up to date due to this incident.
Regarding to, WazirX hack said that it is a force majeure event – something that the company could not specifically prevent since such activities are unpreventable – but added that the company is now actively on the hunt to look for the lost funds. This exchange has canceled several deposits and has contacted related wallets for the return.
Who or What is WazirX and how does the service operate?
Introduction to WazirX
WazirX is an Indian based Cryptocurrency exchange as discussed in the earlier section. It was established in the year 2018 and has gained massive popularity as one of the largest cryptocurrency trading platforms to buy/sell the Bitcoin, Ethereum, Ripple, and many other altcoins. WazirX is designed with simplicity in its functionality and hence is well suitable for both the new comer/beginner and the expert or the experienced trader.
How WazirX Works
Account Creation and Verification:
For one to start using WazirX, he/she has to get registered using the WazirX sign up process which will create a user account.
Once the registration is done, customers have to go through Know Your Customer (KYC) check for compliance purpose. This entails producing I.D and addressing documents as a measure of identifying that the person is the one applying for a loan.
Depositing Funds:
After that, the WazirX account is verified, users can deposit money to their WazirX account.
Deposit methods include bank transfers, UPI and cryptocurrency although I noticed that card deposits are not supported. One can deposit the Indian Rupees (INR) or crypto currency.
Trading Cryptocurrencies:
In trading services, WazirX also has options of spot trading which entails the buying and selling of the cryptocurrencies atspot prices across the market.
Some of the functionalities include Limit orders, Stop-loss orders and for the professional traders, the platform supports the Margin trade as well.
Staking and Earning:
WazirX enables the holding of some cryptocurrencies to get returns. Staking is the process of locking up a cryptocurrency in a digital purse in order to contribute to the working of blockchain network. In turn, users receive staking reward.
Security Measures:
WazirX assures security for users’ funds & data like KYC and user data encryption. It uses standard security measures like 2-factor authentication, about 95% cold storage for the users’ funds, and security checkups.
Withdrawal of Funds:
Customers have the ability to transfer money from their WazirX pocket to their bank accounts and other WazirX’s cryptocurrency wallets. As for the withdrawal, the platform allows using INR and popular cryptocurrencies.
Mobile App:
Another advantage of this platform is that WazirX has a mobile application that is available for Android and iOS devices so the users will be able to trade on the go. Basically, the application has a nice design and all the options that are present in the web version of the service.
WazirX Token (WRX):
Similarly, WazirX is an Indian based exchange with its own WRX token. WRX holders are also allowed to pay the trading fees at a lower price besides being able to invest in token sales.