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In 2018, tech giants Nischal Shetty, Siddharth Menon, and Sameer Mhatre founded a company called WazirX. This company eventually grew up to be a leader in the Indian cryptocurrency market. The company has established a strong reputation for its unwavering commitment to compliance and regulatory excellence.
By regularly publishing transparency reports on its anti-money laundering efforts and technological advancements, WazirX instills confidence and trust among its users in India.
Within a span of 6 years, WazirX had over 10 million registered users in India. WazirX grew rapidly due to its user-friendly design for both beginners and experienced traders in crypto market.
However, the company faced unexpected consequences as it was hacked in July 2024. Let us find out if WazirX was hacked or it was a master plan!
When was WazirX
Hacked?
On July 18, 2024, WazirX encountered a significant security infringement. Around 50% of its assets, over $230 million, were filched from its main trading wallet, despite vigorous security benchmarks. The WazirX Ethereum hot wallet unfortunately experienced a significant incident, resulting in the complete loss of all its tokens. This incident has an influential essence for the cryptocurrency industry in India.
Who
hacked WazirX?
A cybersecurity company, Cyfirma, has reported
that the North Korean hacker group called “Lazarus” is behind a significant
theft which includes $96.75 million in Shiba Inu, $11.01 million in Matic,
$52.68 million in Ether, and $7.61 million in Pepe from WazirX. The Lazarus
Group is linked to North Korea's intelligence agency, the Reconnaissance
General Bureau, and has two subgroups, APT38 and BlueNoroff, that targets
financial firms and cryptocurrency exchanges.
Did Binance – WazirX conflicts led to WazirX’s cyber attack?
While there is no
clear link between the Binance-WazirX conflict and the $230 million hack of
WazirX, the tensions may have created vulnerabilities that hackers exploited.
1.
Ownership Conflict:
In 2022, Binance CEO Changpeng Zhao (CZ) denied having command over WazirX,
despite claims from WazirX’s Nischal Shetty that Binance had considerable
leverage. This opacity likely weakened management and created security
loopholes.
2. Cybersecurity Blow: Uncertainty about the obligation for WazirX’s
security, especially regarding third-party custody of its multi-signature
wallets, may have left the platform vulnerable. Internal disputes often lead to
deprioritized security updates.
WazirX’s security conflicts and mismanagement
The July 2024 hack took place while WazirX faced regulatory scrutiny, adding pressure to its operations. The Lazarus Group exploited vulnerabilities in a multi-signature wallet managed by an external provider, likely worsened by WazirX’s internal issues. Reports also suggest that some of WazirX’s security loopholes were leaked from insiders.
Binance
has issued a statement alienating itself from the Indian exchange WazirX,
blaming CEO Nischal Shetty for misleading customers. This comes after WazirX's
multi-signature wallet was hacked, resulting in the loss of over $230 million.
Conclusion
In the absence of definitive evidence, the true nature of this event remains ambiguous, leaving us to question whether it was a spontaneous attack fueled by chance or a meticulously orchestrated incident with a clear agenda.
During a virtual press conference, the firm's advisors illustrated that the company strives to return 55-57 percent of the capital. The crypto exchange platform announced that it is undergoing restructuring and is actively seeking a "white knight" to provide capital and explore potential partnerships and collaborations.
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