India's Largest Cryptocurrency Exchange WazirX Hacked for $230 Million, Indefinitely Suspends Trading

WazirX, India's largest cryptocurrency exchange, was hacked last week due to a vulnerability, resulting in the theft of $230 million worth of cryptocurrencies. These assets accounted for 50% of the exchange's reserves.

Following the cyberattack, WazirX cited force majeure as the reason for indefinitely suspending all trading activities, leaving the recovery of user assets as a significant uncertainty.

Earlier, a mistake by DMM Bitcoin, a cryptocurrency exchange under the Japanese e-commerce site DMM, led to the transfer of $300 million worth of Bitcoin to an unknown address. This incident might have been an inside job, but DMM Bitcoin quickly replenished the lost bitcoins with the support of its parent company DMM, preventing any loss to user assets and keeping trading activities normal.

The situation for WazirX, however, is different. With a reserve fund of 500 million, the theft of 230 million severely impaired WazirX's operational capabilities, leading to the indefinite suspension of trading and efforts to recover the losses.

Recovering losses from a cryptocurrency hack is extremely challenging. WazirX has announced a reward program of up to $23 million for anyone who can help recover the stolen assets.

Details of the hack have been revealed, showing a vulnerability in one of WazirX's multi-signature wallets, protected by 6 administrators, 5 of whom are from the WazirX team.

The data displayed on WazirX's Liminal interface differed from the actual transaction contents, and the hackers exploited this discrepancy to alter the data. However, transactions required authorization from all 6 individuals, suggesting there might be undisclosed issues.

After investigation, the risk management platform Elliptic indicated that the attack was linked to the North Korean hacker group Lazarus, known for launching multiple attacks globally, with increasing frequency in targeting the cryptocurrency sector.