Indian Cryptocurrency Platform WazirX Hit by Security Breach, $234.9 Million Stolen

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WazirX, a popular Indian Bitcoin and cryptocurrency exchange and trading platform, suffered a security breach wherein assets worth a whopping $234.9 million were taken out of the platform.

This is a very significant number, especially considering WazirX’s total holding is worth about $500 million, as per its June proof-of-reserves disclosure. That means almost half of its holdings have been wiped out.

The news was confirmed on Thursday (July 18). WazirX said that the funds were taken out of one of its multisig wallets (the Safe Multisig wallet, to be precise), and the breakdown of the assets stolen was given by Lookonchain, which is a third-party blockchain explorer.

What Happens Now?

WazirX has assured that it’s investigating the matter. Plus, for everyone’s safety, it’s pausing all withdrawals from the platform until further notice. This includes withdrawals via crypto as well as the Indian rupee.

How exactly the attackers managed to steal the holdings is also unknown at the moment, but some sources say that it was undoubtedly because of a vulnerability on the platform itself.

Plus, according to some transaction-related data, the attackers are actively selling the stolen holding using the on-chain exchange Uniswap. However, their ETH holdings are yet to be sold.

What It Means for WazirX?

This is a huge setback for WazirX, to say the least. Just last year, it separated itself from Binance, which was just two years after it was acquired (by Binance). It was quite a high-profile fallout that started in 2022, triggered by a dispute over the firm’s ownership.

So, a breach of this level within a year of the fallout doesn’t look good on WazirX and might raise questions about its ability to manage itself. Not to mention, both customers and investors are equally likely to lose faith in the company.

Cryptocurrency is still relatively new in India. So, when word about WazirX’s data breach got out, it created a panic among crypto investors. As a result, other Indian crypto platforms, such as CoinSwitch and CoinDCX, had to individually reassure their users that it was a WazirX-specific problem, not an India-crypto one.

The timing of this breach couldn’t be worse. The government of India is currently scrutinizing the cryptocurrency industry and considering putting stricter regulations in place. This incident will certainly have an impact on whatever it decides.

Nonetheless, it’s pretty bizarre that an economy like India has still not welcomed crypto with open arms, with there not being a set of rules for crypto trading, but, of course, taxation on crypto exists.