WazirX and Liminal: Clarifying the Security Breach Fallout

WazirX and Liminal- Exploring WazirX’s Debt Restructuring and Liminal’s Defense

WazirX and Liminal– As the debt restructuring process continues for the compromised Indian cryptocurrency exchange WazirX, its digital custody partner, Liminal, has issued a statement addressing the ongoing controversy surrounding the alleged security breach.

Liminal’s Defense Against WazirX’s Accusations

On October 22, Liminal released a statement labeling WazirX’s claims as part of a disinformation campaign. The statement emphasized that, despite previously accusing Liminal of facilitating a $235 million breach in July, WazirX continues to utilize its digital custody services, maintaining a significant portion of its assets on the Liminal platform.

Liminal reported that WazirX held over $175 million in assets with them just 75 days after the security incident. The firm noted, Despite their accusations, as of today, approximately $50 million of their user assets continue to remain on wallets accessed via Liminal Infrastructure.

Cointelegraph reached out to WazirX for comments regarding Liminal’s assertions but had not received a response at the time of publication.

Liminal’s Role in Asset Management

Liminal clarified that it cannot independently initiate transactions involving WazirX’s funds, stating that only the WazirX team has the authority to execute such transactions. This distinction aims to highlight the limits of Liminal’s responsibility in the management of user assets amidst the unfolding crisis.

Furthermore, Liminal referenced WazirX’s recent decision to disclose information regarding 240,000 wallet addresses as part of the debt restructuring process in Singapore. Announced on October 17, WazirX described this disclosure as both a court requirement and a commitment to transparency, intending to establish itself as one of the most open and trusted exchanges in the industry.

Concerns Over Data Disclosure

Liminal expressed concerns that the extensive data submission—spanning over 1,100 pages—has been criticized as a potential disinformation tactic aimed at confusing users and legal authorities. The firm stated, The exchange’s exhaustive submission has sparked intense debate and concern within the cryptocurrency ecosystem.

Adding to the controversy, CoinSwitch co-founder Ashish Singhal reported that WazirX transferred more than $70 million in user cryptocurrency to global exchanges such as Bybit and KuCoin following the alleged security breach in July. We have observed a large chunk of WazirX crypto has been moved to exchanges such as Bybit and KuCoin post the incident, Singhal noted, identifying the movement of $72.12 million to Bybit and $1.5 million to KuCoin.

As the situation develops, the implications for WazirX and its partners continue to unfold, highlighting the complexities and challenges within the cryptocurrency sector.

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