In a shocking turn of events, Indian cryptocurrency WazirX suffered security breaches and was compromised on Thursday, July 18th. WazirX became a victim of sophisticated cyber-attacks, which caused loss in huge digital assets.
The event lightened up a vulnerability not only in cryptocurrency exchanges but also in the decentralized financial system. There was a scramble for information and calls for reassurance over the safety of the funds and reliability of the exchange as news reached investors and stakeholders.
The results of such breaches are not only monetary; on the other hand, they also pertain to trust and faith in the upcoming cryptocurrency market. Right after the investigations began, and security protocols were examined, this scenario brought into the limelight the nature of improving cybersecurity measures within the crypto industry.
On 18 July 2024, WazirX faced a very critical cyber attack on one of the wallets, which was in digital asset custody and wallet infrastructure and multi-wallets in number. Digital assets of more than $230 million were stolen, thus disrupting our ability to maintain 1:1 collateralization with the assets.
Following this unhappy event, Wazir has taken the following immediate steps in totality:
Complaint with the police station through the National Cyber Crime Reporting Portal and initiate a physical complaint. The incident has also been reported to the Financial Intelligence Unit, India, and CERT-In.
Exchanges Notification: Proactively contacted more than 500 exchanges to block identified addresses. Many exchanges have been very cooperative, helping in the recovery to the best of their ability.
Audit Procedures: Wazir is coordinating with cybersecurity experts who stole WazirX's crypto, line-by-line review of the incident and the consequent restoration operations. Preliminary findings are available for your review.
Bounty Program: They have provided a bounty program to ensure speed in recovering the assets, with up to $10,000 in USDT for leading actionable intelligence that would result in frozen and recovered funds. A full 10%, amounting to $23 million, was set aside for the White Hat Bounty.
Temporary Measures: INR and Cryptocurrency Deposits/Withdrawals is temporarily disallowed; Trading Activities were Halted for the Safety of Assets.
Further course of action: The forensic analysis runs on the platform continuously; experts are consulted to estimate the whole impact of the incident. It shall assess and strategize the recovery efforts at the very earliest.
Efforts would be made to enable the withdrawal of funds. This time-consuming process includes forensic analysis and security audits.
Further Updates: The crypto exchange stated, “Keep regular updates to continue transparently and address concerns throughout the process. Our first interest is in the security and well-being of our users. What has transpired is a force majeure event and beyond our control. However, Wazir shall not leave any stone unturned in retrieving the funds that have been robbed. Active cooperation and support with tier-one resources and experts are underway in pursuit of these recovery efforts”.
In particular, details of whoever exactly pilfered WazirX's digital assets through the cyber attack are not public at the time of writing this update. Such incidents involve complex forensic analysis and investigations with law enforcement agencies to trace the culprits.
It is part of standard practice not to reveal any specific details of an ongoing investigation so that recovery efforts on the part of lost funds or apprehension of those responsible are not jeopardized. Hence, who stole WazirX's crypto is not known for now.
WazirX does not have its native cryptocurrency. In fact, WazirX supports an enormous variety of cryptocurrencies, including famous ones like Bitcoin, Ethereum, Ripple, Litecoin, and many more.
Founded in 2017 by Nischal Shetty, Sameer Mhatre, and Siddharth Menon, WazirX rapidly emerged as one of the biggest cryptocurrency exchanges in India. It has users trading on the platform for its user-friendly and secure features. It allows the buying, selling, and trading of cryptocurrencies against a few trading pairs, wherein one cryptocurrency can be exchanged either for another or for fiat currency like USD or INR.
WazirX operates on a mechanism in which users are allowed to place market orders, limit orders, or stop-limit orders for trade execution at real-time prices. This also includes some of the advanced trading features, such as spot trading, futures trading, and P2P trading. Moreover, WazirX has a native token, WRX, which can be used within the platform for trading fee discounts among others, like participation in token sales.
WazirX assumes an influential role in the crypto space since it is a safe and fair gateway to digital asset trading and investment.
The crypto exchange industry as a whole was passing through strong turmoil about security breaches. Cyber-attacks are one of the threats looming continuously over exchanges across the globe and make quite imperative the need for strong security.
Best practices by investors and cryptocurrency platform users, such as robust authentication and careful fund management, may help protect against the possibility of risk. Exchanges like WazirX play an extremely crucial role in facilitating transactions in digital assets within the ever-evolving cryptocurrency ecosystem.
Such secure operations are only possible due to protection against user fund hacks, fostering stakeholder trust and confidence. The way forward for cryptocurrency exchanges through an increasingly digitized financial future will be by the continued betterment of technologies in cybersecurity and the regulatory framework, weeding out loopholes to make them more secure in the long run.
To make it more secure, use unique strong passwords and activate 2FA. Be wary of keeping the lion's share of your funds in an offline safe wallet, rather than keeping them on the exchange.
Immediately inform the exchange's support team and freeze your account, if possible. Monitor any unauthorized withdrawals in your transaction history and proceed with their specifications for reporting such security incidents.
Exchanges have incorporated different methods of security. They can be in the form of encryption, cold storage of funds, regular security audits, monitoring for suspicious activity, and insurance against hacking and cases of theft.
Risks include potential hacking and the consequent loss of funds, regulatory changes that will affect the running of the exchange, and cryptocurrency volatility affecting the results of trades.
You need to consider the reputation of the exchange, security features, the kind of cryptocurrency accepted, trading fees, liquidity, the quality of customer support provided, and adherence to the law and regulative requirements where you are located.