WazirX exchange experienced a massive hack that bled more than $230 million worth of clients’ funds. After halting withdrawals, the exchange restored the account balances and conducted maintenance activity on one of its Safe Multisig wallets, which had been compromised during the hack.
India’s largest Bitcoin exchange, WazirX, was hacked, causing the firm to lose $234 million in clients’ deposits.
The incident happened nearly a month ago, on July 18th, and affected 45% of user funds. The perpetrators are believed to be North Korean hackers. The firm announced it had immediately swung into action to reverse the hack and recoup the funds.
WazirX restores customer funds after the hack, but withdrawals still suspended
The company issued an updated statement detailing that maintenance personnel are working to fix the issues. The exchange was reportedly working to restore both Indian Rupee (INR) balances and settle crypto balances as well.
👋 tribe! On top priority we’re working on two aspects:
1. Solution for INR balances2. Solution for crypto balances
Both these solutions need legal analysis which is ongoing. At the same time we’re also waiting on some positive confirmations from the various partners who can… pic.twitter.com/vL2wCv63ON
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 16, 2024
In the announcement, the exchange emphasized that implementing the solutions required comprehensive legal analysis. The exchange also requested more time to solve the issues and mentioned that it had partnered with various stakeholders to develop permanent solutions.
In a different X post, the exchange detailed that the maintenance process had been completed and that all malicious trades executed during the hack had been undone. According to the X post, WazirX’s team had restored the account balances. However, withdrawals remain restricted.
The maintenance team reportedly fixed the affected exchange’s Safe Multisig wallets, which had been compromised during the hack. The team also updated the platform to allow customers to see their account balances. However, withdrawals are still suspended.
The victims are still frustrated because there is no defined date for accessing their funds and withdrawing them. Such refunds could take a long time, as seen in the Mt. Gox refund process, which put creditors on hold for almost a decade.
One Indian investor urged the exchange to resume withdrawals and restart crypto trading activities as soon as possible.
“Stop beating around the bush. Start trading and withdrawals asap.”
–Indian investor
India’s Bharat Web3 Association tightens cybersecurity following WazirX’s incident
WazirX had initially proposed a loss-sharing model in a socialized fund recovery plan governed by a 55/45 approach to distribute the losses equally to all users. According to a blog post from the exchange, affected clients were to receive immediate access to 55% of their assets, and the remaining 45% were to be converted to stablecoin USDT and locked. However, the plan faced much backlash and criticism from victims and investors.
India’s Bharat Web3 Association (BWA) increased consumer protection and tightened cybersecurity measures in response to WazirX’s attack. A local news outlet reported that BWA formed two groups internally to investigate the incident and address consumer security concerns.
According to the local media outlet, the two groups will consist of individuals from the association’s members, such as Coinbase, Polygon, Tax Nodes, Biconomy, and Hike, among others.
