WazirX, India’s leading cryptocurrency exchange, has faced a significant data security breach, resulting in the alleged transfer of approximately $234 million worth of digital assets to an unknown address. This incident highlights ongoing cyber security concerns within the cryptocurrency sector.
The exchange confirmed the breach on the social media platform X, stating, “We’re aware that one of our multi-sig wallets has experienced a security breach. Our team is actively investigating the incident. To ensure the safety of your assets, INR and crypto withdrawals will be temporarily paused.” Multi-signature wallets are designed to enhance security by requiring multiple private keys for transactions.
In another update on X, WazirX disclosed that the cyber attack involved a loss exceeding $230 million from a multi-sig wallet that had been utilizing Liminal’s digital asset custody services since February 2023. The breach was attributed to a discrepancy between the data displayed on Liminal’s interface and the actual transaction contents.
This security incident follows a challenging period for WazirX. Last December, the exchange’s trading volume plummeted to $1 billion, marking a 90 percent drop from 2022 levels, largely due to increased regulatory pressure and India’s stringent crypto tax regime.
The Indian government imposed a 30 percent tax on virtual currencies and a 1 percent deduction for every crypto transaction in 2022. Additionally, the Enforcement Directorate (ED) investigated several cases under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA) related to cryptocurrencies, IANS news report said.
In August 2022, the ED froze WazirX’s accounts worth Rs 64.67 crore, alleging the exchange facilitated money transfers for 16 Indian fintech firms and loan apps to unknown foreign wallets. The ban was later lifted, allowing WazirX to resume its banking operations.
InfotechLead.com News Desk
