Amid this ongoing potential bull run, the Indian crypto market experienced a major setback as the fastest-growing cryptocurrency exchange lost nearly $235 million due to a security breach. On July 18, 2024, Cyvers, a prominent web3 security company, disclosed a major security breach involving WazirX, a leading Indian cryptocurrency exchange.
WazirX Loses $235 Million Due to Security Breach
WazirX’s Safe Multisig wallet on the Ethereum blockchain was reportedly at the center of multiple suspicious transactions, totaling around $234.9 million. The funds were quickly moved to a new address, with each transaction unidentified through Tornado Cash, a decentralized protocol known for obfuscating transaction traces.
ALERTHello @WazirXIndia, Our systems have detected multiple suspicious transactions involving your Safe Multisig wallet on the#ETHnetwork. A total of $234.9 million of your funds have been transferred to a new address. The caller of each transaction was funded by @TornadoCash. Suspicious… pic.twitter.com/4sajAwd4Hb
— Cyvers Alerts (@CyversAlerts) July 18, 2024
The incident came to light through insights shared by ZachXBT, a popular crypto investigator on Telegram. He reported that the primary attacker’s address still holds assets worth over $104 million, potentially indicating further threats to WazirX’s assets.
Initially comprising a diverse portfolio, the compromised WazirX wallet included notable tokens such as $100 million in Shiba Inu, $52 million in Ethereum, and $11 million in Polygon. Other affected assets ranged from meme coins like FLOKI to legacy tokens like Fantom and Chainlink.
In response to the breach, WazirX took immediate action by suspending all cryptocurrency and Indian rupee withdrawals. The exchange assured users that it is actively investigating the incident and will provide updates as the situation develops. However, it has yet to disclose details about the security of user funds or potential plans to recover the stolen assets.
Indian Government Action Against Cryptocurrency Exchanges
Meanwhile, the regulatory landscape for cryptocurrencies in India remains uncertain. The Indian Ministry of Finance’s Financial Intelligence Unit recently issued compliance notices to several foreign exchanges, including OKX, urging Indian users to close their accounts by April 30 as services in India cease. The move underscores the ongoing challenges and ambiguity surrounding cryptocurrency regulations in the country, despite years of discussion.
As stakeholders await further developments from WazirX and regulators, the incident serves as a stark reminder of the vulnerabilities in the cryptocurrency industry and the urgent need for robust security measures to protect user funds and maintain market integrity.
Despite all these updates, the crypto market as a whole has not seen any declines. At the time of writing, the overall market is up 1%, with top assets including Bitcoin, Ethereum, and Solana up nearly 1%.
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