As a seasoned researcher with years of experience in the complex and ever-evolving world of cryptocurrencies, I find myself both intrigued and concerned by the recent developments at WazirX. On one hand, it’s commendable that the exchange is expediting its Phase 2 withdrawals, providing some relief to its users ahead of schedule. However, the news of the hacker moving funds to Tornado Cash raises serious concerns about the security measures in place at the exchange.
The individual responsible for the massive cryptocurrency heist on WazirX, amounting to approximately $230 million, has begun transferring the stolen funds to Tornado Cash – a crypto mixer designed to conceal transaction tracks. Recent reports indicate that this hacker has moved around 2600 Ethereum, equivalent to roughly $6.5 million in total.
The WazirX hacker had stolen $52 million worth of Ethereum (ETH) last month and has begun to spin off partial quantities using the Tornado Cash mixer. This popular crypto mixer allows users to transfer their tokens while masking addresses on the blockchain networks.
In essence, it ensures enhanced user privacy by erasing the history of transactions. However, Tornado Cash has gained popularity among cybercriminals like hackers, who use it to conceal their transaction activities.
According to information from PeckShieldAlert, a hacker who targeted WazirX recently transferred approximately $6.5 million in Ethereum across numerous transactions, with each transaction typically involving 100 ETH units.
9 hours ago, an exploiter-labeled address moved approximately 2600.1 ETH (equivalent to around $6.5 million) towards Tornado Cash on WazirX, a crypto exchange based in India. This action follows the significant security breach that occurred on July 18, resulting in the loss of over $230 million in cryptocurrencies from WazirX.
— PeckShieldAlert (@PeckShieldAlert) September 3, 2024
It’s worth noting that this change took place during the time when the Indian cryptocurrency exchange was in the process of reorganizing its operations. During their latest WazirX meeting, the leadership team discussed topics such as recovering lost crypto assets, readjusting crypto balances, implementing a protective moratorium, and other relevant matters.
WazirX Phase 2 Withdrawal Kickstarts
The Indian cryptocurrency platform has initiated Phase 2 withdrawals a week prior to the initial planned date of September 9. As of now, any user who meets the eligibility criteria can withdraw up to the maximum 66% of their INR balance, according to the crypto exchange’s announcement.
Phase 2 of INR withdrawals is live ahead of schedule.
We’re putting in maximum effort to ensure quicker outcomes. Our goal is always to surpass the deadlines we provide, and we’ll do everything possible to achieve that.
To keep the momentum going we need your…
— Nischal (Shardeum) 🔼 (@NischalShetty) September 3, 2024
In a recent call with journalists, WazirX founder Nischal Shetty disclosed that customers might stand to lose approximately 43% of their funds in the exchange, according to his current estimates. However, other market experts suggest that the best-case return could range from 55% to 57%. Shetty emphasized that these figures were valid as of Monday and may change.
“He explained that right now, we’re engaged in discussions and brainstorming ideas, so you won’t be able to view it today. However, over the coming weeks, as things progress, it should become more understandable and straightforward at each stage, enabling us to address any gaps,” he said.
On Tuesday, September 1, the Singapore High Court is set to examine WazirX’s appeal for a six-month period of protection from legal action. This comes as the Indian cryptocurrency exchange prepares to restructure its debts, with the application being made by Zettai, a company incorporated in Singapore, whose Indian subsidiary, Zanmai, operates the exchange.
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2024-09-03 11:07