As a seasoned researcher with years of experience tracking cybercrimes in the crypto world, I can’t help but feel a sense of deja vu when I read about the WazirX hack and its aftermath. It seems like we’ve been here before, with one cryptocurrency exchange after another falling victim to hackers.
The funds stolen from Indian crypto exchange WazirX have been transferred again, this time totalling 15,000 ETH, worth approximately $2,431 each. Since Monday, these transactions were made in three batches and sent to the privacy service Tornado Cash. As of Thursday, the hacker’s wallet still holds over $50 million in various cryptocurrencies. Here are some key details:
WazirX’s Ongoing Restructuring and Blame Game
In July, a major security incident took place at WazirX, resulting in a substantial financial loss. Approximately $100 million worth of Shiba Inu (SHIB) and $52 million worth of Ether (ETH) were stolen during this event. This incident has compelled WazirX to initiate restructuring proceedings as they grapple with the aftermath. As part of the restructuring process, WazirX founder Nischal Shetty has accused several parties, including custodian Liminal and crypto exchange Binance, for the hack.
According to Shetty, it’s been proposed that Binance held a significant amount of WazirX’s resources. He argues that this control may have prevented WazirX from reimbursing users who were impacted.
Binance Refutes Claims and Addresses Misleading Information
Binance, however, has strongly refuted these claims. In a recent blog post, Binance stated:
The WazirX group, including Nischal Shetty, persistently provide confusing information to WazirX users and the financial market about the connection between WazirX and Binance.
The statement emphasized that Binance has never owned, controlled, or operated WazirX, and criticized Shetty’s attempts to deflect responsibility. Binance’s rebuttal comes amid growing frustration as the stolen funds are moved to Tornado Cash. Tornado Cash, a privacy service, allows users to obscure their transaction history, making it a common tool for laundering stolen cryptocurrency. While the service itself is legal, its use by hackers to clean their digital footprints complicates efforts to track and recover stolen assets.
User Backlash and Future Plans
WazirX, currently undergoing a company reorganization due to substantial financial losses, has presented a compensation plan for impacted users. In a recent online gathering on YouTube, the CEO of WazirX, along with other key figures, discussed the reorganization strategy. This strategy involves paying users back proportionately, but their total investments will be reduced by 45%. The reorganization process encompasses evaluating the worth of remaining assets and any recovered tokens, however, it does not include “ringfenced” tokens or profits generated from the reorganization.
Critics have voiced disapproval towards the restructuring process, expressing their annoyance over the management’s choice to exclude accumulated profits from the compensation fund. However, Shetty clarified that WazirX was sold in 2019 and the current operator, Zettai, does not possess the prior earnings. This explanation has failed to alleviate user unhappiness, as many believe the exchange should utilize its past income to assist affected clients.
The WazirX cyberattack underscores an alarming pattern of significant cryptocurrency heists. With WazirX grappling with reorganization and facing scrutiny over payouts, this occurrence emphasizes the immediate need for enhanced security and responsibility within the digital currency sector.
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2024-09-19 13:30