WazirX to Restore User Balances After $235 Million Hack, Reverses Post-Hack Trades

WazirX to Restore User Balances After $235 Million Hack, Reverses Post-Hack Trades

In response to a massive $235 million hack in July 2024, Indian cryptocurrency exchange WazirX has announced plans to restore all platform account balances, following a temporary halt of withdrawals.

On August 8, WazirX revealed its decision to reverse all trades executed after the withdrawal suspension, which began on July 18. According to the official statement, “All users will have their portfolio balances on the WazirX platform restored to what they were on July 18, 2024.” The restoration process is expected to be completed over the next few days, with affected users receiving email notifications about the impacted trades.

Why Is WazirX Reversing Post-Hack Trades?

The decision to revert account balances and nullify specific trades was made to ensure an “equitable outcome for users” following the irregularities that emerged from the July hack. WazirX stated that it would cancel all trades between July 18 and July 21 to guarantee fair treatment for all users. As part of this move, all transactions executed after 07:30 am UTC on July 18 will be invalidated, with users’ portfolios returning to their previous state.

The platform also clarified that any fees or referral bonuses generated from these trades would be reversed accordingly. Additionally, WazirX assured users that any fiat or cryptocurrency deposits made after July 18 would be addressed in a future update.

The Multisig Wallet Compromise Behind the $235 Million Breach

Established in 2017, WazirX is one of India’s leading cryptocurrency exchanges. The first signs of the $234.9 million hack were detected on July 18, when Web3 security firm Cyvers noticed a series of “multiple suspicious transactions” involving WazirX’s Safe Multisig wallet on the Ethereum blockchain.

A multisignature wallet, or multisig wallet, requires multiple signatures to authorize and complete a cryptocurrency transaction. WazirX’s compromised wallet had six signatories: one from the digital custody platform Liminal and five from WazirX itself.

The breach reportedly occurred due to inconsistencies between the data displayed on Liminal and the actual transaction details on WazirX. While Liminal staff argued that their platform remained secure and was not breached, WazirX claimed otherwise. Liminal’s report later suggested that the hack may have been caused by compromised machines within WazirX.

As a result of the hack, an anonymous attacker allegedly stole at least $100 million in Shiba Inu tokens and $52 million in Ether, representing 45% of WazirX’s total reserves.