WazirX Transfers Remaining Assets—What This Means for Investors

August 14, 2024 at 11:12 PM GST 2 mins read News

• Having lost $230 million in a recent hack, WazirX said it has redistributed the rest of its balances to new multisig wallets
• The breach exploited flaws in Liminal Custody services, forcing WazirX to sever its connection with the custodian and transfer funds to safer wallets.
• Participants complained that even if WazirX is transparent with their funds and has established these measures to safeguard them, many investors want their money back ASAP.

WazirX, a cryptocurrency exchange based in India, is beginning to tighten up security for its clients after its recent attack. As a result of the attack, the assets were migrated from Liminal Custody to fresh multisig wallets belonging to the exchange. This followed the cybercrime on July 18, where around $230 million worth of digital currencies were stolen.

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WazirX revealed that the cyber-attack on July 18 targeted a multi-signature wallet that held most of the company’s funds for its investors. The wallet was under the control of four decision-makers—three from WazirX and one from Liminal Custody. 

While WazirX’s internal systems were not breached, as reported by the exchange, the attack exploited vulnerabilities in the custodian’s technology. This breach led to the loss of approximately 44.6% of the wallet balance’s value and caused significant concern among investors who had entrusted their funds to what they perceived as an insecure platform.

Addressing Liminal Custody Issues and WazirX’s Reaction

Following this incident, WazirX has opted to sever its partnership with Liminal Custody and consolidate the remaining funds in new multisig wallets. This decision conveys the exchange’s strategy of protecting user funds and preventing similar future threats. Before the hack, WazirX stated that even though their interface and systems were unaffected, they couldn’t guarantee the safety of Liminal’s platform after the attack.

WazirX’s actions in transferring its assets have received mixed responses. Despite the assurance by the exchange that the change is deemed necessary to improve security and prevent hacking, many investors still need to be satisfied. 

This hack has hampered a large portion of their fund’s procurement, and thus, users are fuming and demanding immediate ability access. WazirX has stated that it will remain fully transparent throughout the migration process and that the new wallet details will be revealed as soon as the transfer is successfully processed.

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