Breaking: $234 Million Drained from Indian Exchange WazirX, Withdrawals Suspended

One of India’s leading crypto exchanges, WazirX, has been hit by a major security breach, resulting in the loss of $234 million in a series of suspicious transactions. Following the breach, WazirX confirmed the incident and announced the temporary suspension of withdrawals on the platform.

Details of the Security Breach

The blockchain security platform Cyvers Alerts first reported the incident, detecting multiple suspicious transactions involving WazirX’s Safe Multisig wallet on the Ethereum network. A total of $234.9 million in funds have been moved to a new address, with each transaction’s caller funded by Tornado Cash, a privacy tool often used to obfuscate transaction details.

The suspicious wallet, identified as “0x04b2,” has already dumped $7.6 million worth of PEPE tokens and swapped GALA and USDT to ETH. According to Lookonchain data, the withdrawn funds include over $100 million in Shiba Inu (SHIB) tokens, $52 million in Ether (ETH), $11 million in Matic (MATIC), and $6 million in Pepe (PEPE). The hacker has already started liquidating these assets.

Expert Insights

Bradley Park, a Web3 Analyst at CryptoQuant, told CryptoNews, “This is the SHIB reserve on WazirX. You can see that 5.4T has been taken off the exchange. These assets are likely to be sold for Ethereum at any time.”

Impact on WazirX

According to WazirX’s latest Proof of Reserve report, the total holdings of the exchange were valued at just above $502 million. This hack represents a significant setback for WazirX, which is already under scrutiny from regulators. Indian crypto exchanges are facing heavy pressure due to low trading volumes since the implementation of a 1% TDS on each transaction, prompting retail customers to prefer foreign exchanges to avoid these taxes.

Regulatory Challenges

Earlier, India’s Financial Intelligence Unit (FUI) blocked URLs of several foreign crypto exchanges, including Binance, for non-compliance with local AML policies. This adds to the regulatory challenges faced by domestic exchanges like WazirX.

Conclusion

The security breach at WazirX highlights the ongoing risks and challenges in the cryptocurrency space, particularly for exchanges operating under stringent regulatory environments. The suspension of withdrawals and the significant loss of funds underscore the need for enhanced security measures and regulatory compliance to protect investors and maintain market integrity.

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