After a massive downturn in the crypto market, the overall market once again looks to struggle. However, during this ongoing struggle, Indian cryptocurrency exchange WazirX experienced a notable $230 million security breach. Following this breach, the majority of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), are trading 35% lower than on other Indian crypto exchanges such as CoinDCX and Zebpay.
Cryptocurrencies at 30% discounts
Blockchain tracker Lookonchain reported that the stolen funds have been primarily converted to ether (ETH). As of Friday morning, the exploiter holds over 59,097 ETH, valued at $200 million, along with $15 million in various alternative tokens.
Hackers typically convert stolen tokens to ether to use mixing services like Tornado Cash, which obscure transactional activity and facilitate money laundering. This strategy makes it harder to trace and recover the stolen funds.
The hack has caused considerable turmoil in the market. Almost all tokens listed on WazirX are trading at significant discounts compared to their global and local prices, indicating poor liquidity and immense selling pressure. The Bitcoin/Rupee pair has dropped 22% in the past 24 hours, a stark contrast to the 2% decline seen on other local exchanges like CoinDCX and Zebpay. The Shiba inu/rupee pair has plummeted by 30%.
Whereas, WazirX’s own WRX token has suffered a 40% decline in the last 24 hours. Concurrently, trading volumes on the exchange surged to $8 million from $2.2 million on Wednesday, reflecting a frantic sell-off by users.
The security breach occurred on Thursday, targeting one of WazirX’s multisig wallets. The hackers managed to drain over $100 million in Shiba Inu (SHIB) and $52 million in ether, among other assets. The stolen funds represent over 45% of the exchange’s total reserves, as cited in a June 2024 report, significantly impacting user confidence and hopes for recovery.
WazirX temporarily suspended services
WazirX attributed the breach to a “mismatch” between their digital interface and a major crypto wallet. Despite having five signers for the wallet, the exploit allowed the attacker to gain control. The exchange explained, “During the cyber attack, there was a mismatch between the information displayed on Liminal’s interface and what was signed. We suspect the payload was replaced to transfer wallet control to an attacker.”
WazirX has temporarily paused all crypto and fiat withdrawals in response to the breach. This incident highlights the urgent need for robust security measures and greater transparency within the cryptocurrency industry, especially as it grows and evolves. The WazirX hack is a stark reminder of the vulnerabilities that still exist and the critical importance of safeguarding user assets.
