Indian Crypto Exchange WazirX Suffers Massive Security Breach

In the early hours of Thursday in Europe, Indian cryptocurrency exchange WazirX experienced a significant security breach, resulting in over $230 million in withdrawals, predominantly in Shiba Inu (SHIB) tokens.

Details of the Security Incident

“We’re aware that one of our multisig wallets has experienced a security breach. Our team is actively investigating the incident,” WazirX confirmed in a post on X. To safeguard user assets, the exchange has temporarily paused all INR and crypto withdrawals.

North Korean Hackers Implicated

Blockchain investigation firm Elliptic has attributed the attack to hackers linked to North Korea. The stolen funds represent more than 45% of WazirX’s $500 million in holdings, as reported in June. At the time of writing, WazirX’s live proof of reserve site is undergoing maintenance.

Multisig Wallet Compromise

WazirX initially identified Liminal, a crypto custody firm, as the provider of the compromised multisig wallet in a follow-up post. However, this post was later deleted after Liminal clarified that the compromised wallets were created outside of their ecosystem. Multisig wallets require multiple private keys to authorize and confirm transactions, adding an extra layer of security.

Impact and Response

The Indian Financial Ministry has not commented on the attack or its implications for the country’s cryptocurrency ecosystem. Blockchain data tracked by Lookonchain reveals the extent of the losses: over $100 million in SHIB tokens, $52 million in Ether (ETH), $11 million in Matic’s MATIC, and $6 million in Pepe (PEPE).

WazirX’s Market Position

WazirX, favored by Indian traders, primarily targets the Indian market and is among the few exchanges registered with the Financial Intelligence Unit (FIU) in India. This registration allows it to offer cryptocurrency exchange services to Indian citizens.