Digital Assets Worth $234 Million Stolen in Major Security Breach
Indian crypto exchange Wazirx has temporarily suspended customer withdrawals following a significant security breach that resulted in the loss of nearly $234.9 million worth of digital assets. The theft, which took place on Thursday, has raised serious concerns about the platform’s security and the volatility of the cryptocurrency market.
The stolen amount represents almost half of Wazirx’s total assets, leading to widespread caution among crypto executives and investors. The exchange confirmed the breach on the social media platform X, assuring users that steps are being taken to investigate the incident and secure their assets.
“We’re aware that one of our ‘multisig’ wallets has experienced a security breach. Our team is actively investigating the incident. To ensure the safety of your assets, INR and crypto withdrawals will be temporarily paused,” the company said in a statement.
A ‘multisig’ or multisignature wallet is a type of crypto wallet that requires multiple private keys to authorize transactions, providing an additional layer of security. Despite this, the breach has highlighted vulnerabilities in Wazirx’s security infrastructure.
Liminal Custody, a platform that services some of Wazirx’s wallets, clarified that its system was not compromised during the breach. In a press statement, the company stated, “Our preliminary investigations show that one of the self-custody multi-sig smart contract wallets created outside of the Liminal ecosystem has been compromised. We can confirm that Liminal’s platform is not breached and Liminal’s infrastructure, wallets, and assets continue to remain safe.”
The company further assured that all Wazirx wallets created on the Liminal platform remain secure and that the malicious transactions originated outside of their system.
The magnitude of the stolen assets has intensified scrutiny over Wazirx’s security practices, especially since the amount equals nearly half of the exchange’s total holdings, as indicated by its recent proof of reserves (POR) report published in June 2024.
A POR report serves as evidence that a financial entity possesses the holdings it claims to have, providing transparency and assurance to customers. Crypto firms publish these audits to demonstrate liquidity, ensuring users that they can withdraw their funds at any time.
In light of the breach, crypto industry executives have warned investors about potential market volatility. The incident underscores the risks associated with digital asset trading and the importance of robust security measures.
The Wazirx breach follows a series of high-profile security incidents in the cryptocurrency industry, raising questions about the safety and reliability of digital asset exchanges. As investigations continue, the crypto community will be watching closely to see how Wazirx addresses the fallout and enhances its security protocols to prevent future breaches.
Investors and users of Wazirx are advised to stay informed about developments and exercise caution in their trading activities. The incident serves as a stark reminder of the challenges and risks inherent in the rapidly evolving world of cryptocurrency.
