Big Trouble in the Crypto World: A Cyberattack on WazirX!
Cryptocurrency has been making news all around the world. People trade digital money like Bitcoin, Ethereum, and other cryptocurrencies through special platforms, like WazirX—one of India’s biggest crypto exchanges. But what happens when these platforms, which are supposed to be super secure, get hacked? That’s exactly what happened in a shocking cyberattack that caused WazirX to lose billions!
Let’s break down the situation and take a closer look at how it all unfolded.
What Happened?
Back in July, cybercriminals targeted WazirX, stealing a huge amount of digital assets—around Rs 2,000 crore worth! This is roughly 45% of all the money WazirX was holding for its users.
The investigation got a major breakthrough when the Delhi Police arrested a man named SK Masud Alam from West Bengal for his role in the attack. According to the police, Alam didn’t act alone but played a key part by creating a fake WazirX account. They say he sold this account to another person (known only as M Hasan), who then used the account to break into WazirX’s systems.
The Role of the Fake Account
Here’s how the scheme reportedly worked:
- Alam opened an account under the name Souvik Mondal (which wasn’t his real name).
- He then sold this account to Hasan through Telegram, a messaging app.
- Hasan used this fake account to get into WazirX and mess with the system, leading to the massive loss of money.
This was a carefully planned cyberattack that involved multiple steps, and the police are still investigating how exactly the criminals got away with such a large amount of cryptocurrency.
A Company Under Fire: What is Liminal Custody?
You might be wondering, how could WazirX lose so much money? Well, a company called Liminal Custody was supposed to protect WazirX’s wallets—the digital “places” where all the cryptocurrency was kept. But according to the charges filed by the police, Liminal Custody wasn’t fully cooperating in the investigation. The company did issue a statement saying it had done its part by formally replying to the authorities and even meeting with them. However, the investigation suggested further details were needed, and Liminal Custody’s role may still come under scrutiny.
Wallet Types: Hot vs. Cold Wallets
When we talk about wallets in crypto exchanges, there are two main types:
- Hot Wallets: These are connected to the internet and allow users to quickly trade or withdraw currency. But they’re also easier targets for hackers!
- Cold Wallets: These are stored offline, making them much harder to hack, but trading from them is a lot slower.
In the case of WazirX, criminals attacked its hot wallet first and then tried to get into the cold wallet. Fortunately, WazirX claims the more-secure cold wallet kept away the hackers during the attack, but the damage had already been done.
The Investigation So Far
The Delhi Police’s Intelligence Fusion and Strategic Operations (IFSO) department is working hard to solve the case. They’ve already seized three laptops from WazirX, which belonged to people who could approve crypto transactions. This is important because WazirX uses a multi-signature (multi-sig) wallet system, where multiple people must approve any money being moved. Authorities are now inspecting whether any part of that system could have been misused.
On the bright side, WazirX has been cooperating fully with law enforcement agencies by providing important information, like the KYC (Know Your Customer) details needed to open accounts and the transaction logs showing what happened during the attack.
Liminal Custody’s Response
While the authorities had concerns about Liminal Custody, the company has denied any wrongdoing. In a public statement, a spokesperson from the company said they are doing everything they can to support the investigation. They’ve also stressed that they follow all the necessary regulations to ensure the safety and transparency of their services.
What Happens Next?
The investigation is still ongoing, and the police have promised to keep digging deeper. They’re also expected to release more information in an updated report, called a supplementary chargesheet. Right now, it’s clear that this cyberattack has left many people shaken, especially users of WazirX.
In Conclusion
This case has raised a lot of important questions about how secure cryptocurrency platforms like WazirX really are. The success of the attackers in stealing such a large amount of crypto makes people wonder about the strength of our online defenses and the role of companies like Liminal Custody, which are responsible for safeguarding digital assets.
But the authorities are on the case, and with WazirX fully cooperating, there’s hope that these criminals will be caught, and important lessons will be learned to prevent something like this from happening again.
So, while cryptocurrencies offer some cool opportunities, this story reminds us that cybersecurity is an ongoing battle. Always be careful out there!