CandleFocus

The inside story of WazirX’s $235M hack and how it’s destroying users lives left without answers

Author: Content Editor
WazirX, the largest cryptocurrency exchange in India, was hacked on July 18, resulting in a loss of $235 million worth of crypto assets. The exchange temporarily suspended all withdrawals, leaving users unable to access their funds. More than 45 days later, withdrawals remain on hold, and WazirX has provided limited updates on recovery efforts, leading to frustration and mistrust among users. The exchange attempted to shift blame onto its digital custody partner, Liminal, but Liminal denied any fault. Cryptosecurity firms raised concerns about WazirX's security practices before the hack. WazirX's proposal to distribute losses through a "socialized losses" program was met with backlash. The exchange terminated its partnership with Liminal Custody and hired Mandiant to conduct a forensic analysis. Liminal's investigation found no evidence of compromise within its systems, suggesting the breach occurred due to issues within WazirX's setup. WazirX imposed new restrictions on withdrawals, further exacerbating user frustration. The exchange announced it would seek a moratorium through Singapore's legal system, potentially shielding it from legal action and delaying the recovery of funds for at least six months. Users who shared their stories expressed frustration, despair, and financial distress. Experts criticized WazirX's handling of the situation and lack of transparency. Legal experts advised users to pursue their claims in Indian courts and not be discouraged by WazirX's attempt to shift legal proceedings to Singapore. As legal pressure mounts, WazirX may face the force of Indian consumer protection laws, potentially setting a precedent for holding crypto exchanges accountable in India.

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