Hacked Indian cryptocurrency exchange WazirX has revealed the details of approximately 240,000 wallets with balances. As WazirX undergoes restructuring, driven by legal proceedings in Singapore involving Zettai Pte Ltd, the company filed an affidavit with the High Court of Singapore and will also share the document with the Committee of Creditors.
WazirX has also explained their next move. Next on the agenda is the introduction of Proof of Reserves (POR), a feature that will verify the exchange’s holdings against its liabilities.
Once the consolidation process is complete, WazirX plans to work with third-party custodians to ensure the secure accounting and management of all token assets.
WazirX explained that sweeping wallets is a time-consuming process due to several factors. One major challenge is the network fee — the cost incurred every time a transaction is made on a blockchain. This fee can add up quickly if large numbers of wallets are swept too fast, potentially driving up costs significantly. The crypto exchange has already swept most wallets under three categories: cold, warm, and hot.
Cold wallets are highly secure offline storage options. Warm wallets are somewhat connected to the internet but with extra security layers, balancing accessibility and safety.
Hot wallets, on the other hand, are fully connected to the internet, providing the fastest access for trading and operational needs, but they are also most vulnerable to hacks.
To avoid this, WazirX is moving slowly to manage fees for better optimisation.
“One of the key complexities here is managing the network fees involved in sweeping the wallets. Rushing the process would significantly drive up fees across networks, which is why we are taking a slow and steady approach,” WazirX said.
The cryptocurrency exchange was hacked on July 18, 2024, and approximately $230 million in assets were transferred from its Liminal multi-sig wallets. After a few days, the platform launched a bounty to recover the stolen assets. However, no real progress could be made in this direction.
With no options, WazirX launched a legal restructuring process and initiated talks with 11 crypto exchanges for capital infusion. After more than a month, Nischal Shetty, CEO of WazirX, revealed that crypto deposits and other associated activities are currently under nobody due to a dispute between Zettai and Binance.
Cybersecurity firm Cyvers revealed that WazirX’s delayed response was primarily responsible for this hack.
Meanwhile, hackers continued to move millions upon millions of stolen crypto assets via Tornado Cash, a platform that helps to conceal crypto transactions. Finally, a Singapore court granted a four-month moratorium to the platform.
In India, the government agencies woke up after nearly two months and began probing the $230 million crypto hack, the biggest in the country.
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