WazirX has initiated the second phase of its fiat currency withdrawal process earlier than planned, starting on Sept. 3 instead of the original date of Sept. 9. This decision comes on the heels of a major security breach that resulted in the theft of over $230 million in user assets. CEO Nishal Shetty announced the development on social media, emphasizing the exchange’s commitment to restoring access to customer funds. During this phase, users are allowed to withdraw up to 66% of the total INR amount deposited on the platform, with the remainder to be unlocked at a later time.
WazirX has been grappling with the repercussions of the security breach that occurred in July, where a hacker exploited a vulnerability in one of its multisig wallets. This breach resulted in substantial losses, including $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH). The exchange was forced to suspend its operations and undergo a restructuring process to mitigate the impact on users. Legal experts have cautioned that customers are not likely to recover the full amount of their lost assets, with the best-case scenario pointing to a return of only 55% to 57% of the original funds.
In a concerning development, the hacker responsible for the breach has begun transferring the stolen Ether through a crypto mixer called Tornado Cash on Sept. 2. This move involved approximately $6.5 million worth of Ether being moved in 16 transactions on the Ethereum network. The hacker’s address, holding more than $155 million in various tokens, had not previously utilized Tornado Cash for fund transfers, marking a significant turn in the ongoing probe. The attack on WazirX has been attributed to the North Korean hacking group Lazarus, known for laundering over $1 billion in stolen funds and engaging in sophisticated cyber operations.
While WazirX strives to address its liabilities and restore user confidence through the restructuring process, the future remains uncertain for many affected customers. The possibility of only recovering a fraction of their lost assets has prompted concerns and raised questions about the security measures in place. As the investigation unfolds and more details emerge, it is crucial for the exchange to prioritize transparency and accountability to rebuild trust within the crypto community.
**Note:** The above critique is not exhaustive, and there may be additional points for consideration or discussion.