A West Bengal man was arrested for selling a fake WazirX account that enabled a massive hack costing Rs 2,000 crore.
Liminal Custody, responsible for WazirX wallet security, faces scrutiny for allegedly not fully cooperating with authorities.
WazirX fully cooperated in the investigation, helping authorities with data to trace the cyberattack and uncover the breach.
Delhi Police have arrested a West Bengal resident, SK Masud Alam, for his involvement in the recent WazirX hack. Alam allegedly sold a fake WazirX account on Telegram, enabling the breach of the crypto exchange.
The cyberattack reportedly resulted in losses of around Rs 2,000 crore in digital assets. This arrest is a breakthrough as investigators continue unraveling the complex layers of the case.
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How the WazirX Breach Unfolded
The Delhi Police's Special Cell arrested Alam from East Midnapore, West Bengal, for creating a fake account under the name Souvik Mondal. Alam sold this account to M Hasan, who reportedly used it to execute the cyberattack. Investigators revealed that cybercriminals drained WazirX's hot wallets and attempted to breach the cold wallets. Cold wallets hold funds offline, adding an extra layer of security.
Besides, Delhi Police's Intelligence Fusion and Strategic Operations (IFSO) division seized three laptops belonging to WazirX’s authorised signatories. These devices were reportedly used to authorise critical crypto transactions via multi-sig wallets. The investigation remains ongoing, as authorities continue probing the misuse of wallet authorisation methods.
Liminal Custody Under Investigation
Liminal Custody, the firm responsible for WazirX’s wallet security, faces scrutiny for alleged non-cooperation. Despite multiple requests, Liminal reportedly failed to provide key details requested by Delhi Police. Consequently, the chargesheet raised concerns about Liminal's security protocols and accountability in the breach.
However, Liminal refuted claims of non-cooperation in an official statement. The firm clarified that it has formally responded to inquiries and engaged directly with authorities. A spokesperson emphasised Liminal’s commitment to regulatory compliance and transparent operations. The company pledged to support the investigation while adhering to legal data-sharing frameworks.
WazirX Fully Cooperates
On the other hand, WazirX has fully cooperated with the investigation. The exchange provided essential data, including KYC details and transaction logs, to assist authorities. Investigators found no evidence of unauthorised access to WazirX’s systems, either locally or remotely.
Moreover, this breakthrough highlights the importance of tightening security protocols across crypto platforms. The arrest shows the growing need for stricter measures to prevent similar breaches. As the investigation progresses, all eyes remain on the Indian government to deliver justice to WazirX victims.