WazirX surprised users by initiating the second phase of its fiat currency withdrawal process ahead of schedule on Sept. 3, instead of the previously slated date of Sept. 9. This move comes following a major security breach that resulted in the theft of over $230 million in user assets. CEO Nishal Shetty announced the early withdrawal access on social media, mentioning that the exchange is working diligently 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 the remaining amount to be accessible at a later date.
The security breach in July left WazirX reeling, as a hacker exploited a vulnerability in one of its multisig wallets, resulting in the loss of significant assets, including $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH). Consequently, the exchange had to halt operations and undergo a restructuring process to mitigate the impact on users. Legal experts have indicated that customers are unlikely to recover the entirety of their lost funds, with a projected best-case scenario of 55% to 57% asset return. The ongoing restructuring aims to handle these liabilities, but the future remains uncertain for affected users.
In a parallel development, the hacker responsible for the breach began moving the stolen Ether through the crypto mixer Tornado Cash on Sept. 2, transferring nearly $6.5 million worth of Ether in 16 transactions on the Ethereum network. Notably, the hacker’s address, holding over $155 million in various tokens, had not previously utilized Tornado Cash, marking a significant development in the investigation. The attack on WazirX is believed to be linked to the North Korean hacking group Lazarus, infamous for laundering more than $1 billion in stolen funds and engaging in sophisticated cyber operations.
Despite the challenges posed by the security breach, WazirX is striving to navigate the aftermath and restore user confidence in the platform. The early rollout of the fiat currency withdrawal process demonstrates the exchange’s commitment to addressing customer concerns and facilitating asset recovery. As the investigation into the breach and hacker’s activities continues, the exchange is focused on strengthening its security measures and enhancing safeguards to prevent future incidents. Time will tell how WazirX evolves in the face of adversity and rebuilds trust within the crypto community.
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