WazirX Hacked for $230M, Largely in SHIB, as Elliptic Says North Korea Behind Attack

Indian crypto exchange WazirX suffered a major security breach, resulting in over $230 million in losses, predominantly in shiba inu (SHIB) and ether (ETH) tokens. The breach occurred in one of the exchange’s multisig wallets, which was confirmed in an X post by WazirX. The exchange has paused INR and crypto withdrawals temporarily to ensure asset safety.

The hack, attributed to North Korean hackers by blockchain analytics firm Elliptic, represents a significant portion of the exchange’s reserves. In a June 2024 report, WazirX disclosed holdings of $500 million, making the stolen amount over 45% of its total reserves. WazirX’s proof of reserve site was down for maintenance at the time of the incident.

The multisig wallet involved was identified as being managed by crypto custody firm Liminal. However, WazirX later retracted this identification, as Liminal clarified that the compromised wallets were created outside of their ecosystem. Multisig wallets, requiring multiple private keys for transaction authentication, are generally considered more secure, adding complexity to the breach.

Detailed blockchain data from Lookonchain indicates the loss of $100 million worth of SHIB, $52 million in ETH, $11 million in Matic’s MATIC, and $6 million in pepe (PEPE). The hacker is actively liquidating these assets on Uniswap but has not yet sold their ETH holdings and still possesses over $4.2 million in FLOKI tokens.

WazirX, a prominent exchange among Indian traders and one of the few Financial Intelligence Unit (FIU) registered exchanges in India, is facing heightened scrutiny following this breach. The Indian Financial Ministry has not commented on the attack or its implications for the country’s crypto landscape.

Despite the breach, WazirX maintained significant trading volumes. CoinGecko data shows the exchange handled at least $2.2 million in the past 24 hours, primarily in tether (USDT) and XRP transactions.

This incident underscores the ongoing security challenges faced by crypto exchanges and the critical importance of robust security measures. As the investigation continues, the exchange community and regulatory bodies will be closely watching how WazirX addresses this significant security lapse and the steps taken to prevent future breaches.