Nischal Shetty, the founder of the popular Indian crypto exchange WazirX, announced the company is expanding operations and exploring building a separate decentralized exchange (DEX) that will operate alongside the company's current centralized service.
According to Shetty, the decision to launch a DEX is a response to the July 2024 WazirX hack — which drained the exchange of approximately $235 million in user funds — and should help eliminate the counter-party risk inherent in centralized platforms. The WazirX founder asserted:
"The best thing is that you'll be able to self-custody your assets here — your assets will be completely under your control — and you can freely trade or do what you want with your assets."
The WazirX founder also revealed plans to launch a corresponding DEX token to pay for fees on the platform and provide an instrument for governance.
Shetty explaining the push for a DEX. Source: WazirX
The now-infamous WazirX hack
On July 18, WazirX suffered a breach of its multi-signature wallet in a hack believed to have been perpetrated by the North Korean Lazarus Group.
The attacker, or group of attackers, siphoned the $235 million in stolen funds through Tornado Cash — a privacy-enhancing protocol that comingles funds to obfuscate transaction history and undermines onchain tracking heuristics.
Following the hack, WazirX announced a plan to limit trading capital to 55% of a user's account balance and convert the remaining 45% to Tether-USD (USDT), which would remain locked on the platform. The proposed plan drew widespread criticism from clients of the centralized exchange, who characterized the proposal as a way to "socialize losses."
In August 2024, the exchange also reversed all trades following the hack and restored all account balances to their prior state before the July 18 attack.
At the time, spokespeople for the exchange said the reversal of the trading activity aimed to create an “equitable outcome" for all of its customers.
WazirX struggled to recover the stolen funds months after the attack, as the centralized exchange and its former custody partner Liminal accused the other of being at fault for the security breach and the ensuing loss of funds.
Magazine: WazirX hackers prepped 8 days before attack, swindlers fake fiat for USDT: Asia Express
