Major Cyber Attack Hits WazirX: 45% of User Funds Affected, Recovery Plan Announced

Major Cyber Attack Hits WazirX: 45% of User Funds Affected, Recovery Plan Announced

Last week, WazirX experienced a security breach that enabled hackers to siphon off users’ funds. According to the team, the digital wallet utilized by WazirX had six signatories—five from WazirX and one from Liminal. Transactions required the approval of three WazirX signatories (using Ledger hardware wallets) and one Liminal signatory.

“During the cyber attack, there was a discrepancy between the information displayed on Liminal’s interface and the actual signed transaction, raising suspicions that the transaction payload was altered, resulting in the transfer of wallet control to an attacker,” the team reported.

The hack impacted 45% of user funds, prompting WazirX to adopt a 55/45 distribution approach. Users will have access to 55% of their assets, while the remaining 45% will be locked in Tether. This method of socializing the loss aims to distribute the impact across all users, rather than disproportionately affecting a smaller group.

Registered users will receive email instructions on how to access their assets. Two options will be offered, each with specific benefits and conditions. Users are requested to choose one option by August 3, 2024, 07:00 AM IST.

“The recent cyber attack has posed significant challenges and setbacks for us and our users alike. We are deeply committed to addressing these issues with transparency and fairness. Your input and support as a community are crucial as we navigate this period and work towards restoring full functionality,” WazirX stated.

WazirX noted that it has “taken guidance” from other crypto exchanges, including Mt Gox and Bitfinex, which faced similar challenges.

Last week, Mt Gox began distributing repayments to its creditors, almost a decade after its website was hacked. “As of 2024, [Mt. Gox] creditors have started receiving partial repayments, totaling approximately 20% of the original holdings. This case demonstrates the complexities and potentially lengthy timelines involved in resolving large-scale crypto losses,” WazirX said about Mt. Gox.

WazirX also highlighted how Bitfinex redeemed all BFX tokens within eight months, allowing it to “continue operations while providing users with options and eventually making them whole.”