WazirX Security Breach: $230M in Crypto Stolen

Indian cryptocurrency exchange WazirX has confirmed a security breach that led to the theft of $230 million in cryptocurrency assets. The breach occurred in one of their multi-signature wallets, which utilized Liminal's digital asset custody and wallet infrastructure since February 2023. The attack stemmed from a mismatch between the information displayed on Liminal's interface and what was actually signed, allowing the attacker to transfer wallet control.

Liminal, responsible for transaction verifications, stated that the compromised wallet was created outside their ecosystem. Despite this, all wallets within their platform remain secure. Blockchain analytics firm Elliptic suggested that North Korean threat actors might be behind the attack, a claim supported by crypto researcher ZachXBT, who linked the breach to the notorious Lazarus Group.

The attackers exploited a gap between Liminal's interface and the actual transaction, gaining control of the wallet and bypassing security measures. WazirX has temporarily halted all withdrawals to ensure the safety of remaining assets and is actively investigating the incident. The stolen funds include over $100 million in Shiba Inu (SHIB) tokens, $52 million in Ethereum (ETH), $11 million in Matic (MATIC), and $6 million in Pepe (PEPE).

The market impact has been significant, with WazirX's native token, WRX, experiencing a sharp decline. SHIB has also lost over 6% in U.S. dollar terms, and other affected cryptocurrencies have seen substantial losses in WazirX's INR trading pairs. The bitcoin-rupee (BTC/INR) pair has declined by 11%, and the USDT-INR pair has seen an 8% decrease, reflecting panic selling by investors.

WazirX's response to the breach includes blocking further deposits and attempting to recover the stolen funds. The exchange emphasized that their strong security systems were in place, but the attackers managed to exploit a vulnerability. Liminal clarified that their system was not breached, and all wallets within their platform are safe.

The breach has raised concerns about the security of multi-signature wallets and the potential for future attacks. Multi-signature wallets require multiple private keys to authenticate and confirm transactions, adding an extra layer of security. However, this incident highlights the need for continuous improvement in security measures to protect against sophisticated attacks.

The Indian Financial Ministry has declined to comment on the attack or its implications for the country's crypto ecosystem. The breach has also led to substantial market volatility for affected tokens, with significant losses in both U.S. dollar and INR terms.

WazirX is popular among Indian traders and is one of the few Financial Intelligence Unit (FIU) registered exchanges in the country. The exchange's live proof of reserve site was down for maintenance at the time of writing, adding to the uncertainty surrounding the incident.

The breach underscores the importance of robust security measures and the need for continuous monitoring and improvement to protect against evolving threats. As the crypto industry continues to grow, exchanges must prioritize security to maintain trust and protect user assets.

For more insights on the latest developments in the crypto world, read more blogs from our website.

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