Security breach at WazirX raises questions about internal involvement

Just recently, WazirX was hit by a major breach, resulting in the loss of $230 million in ETH tokens. WazirX now raises suspicions of an insider job. The events of the breach have sparked worries among users regarding how the company managed the crisis and whether there was any complicity.

Justice for WazirX Users (JfWU) claims that inconsistencies in the breach point to a possible collaboration within the organization. They believe that the intricacies of the breach and the way in which funds were compromised imply more than an outside cyberattack.

Users scrutinize WazirX ‘s security protocols, alleging internal collusion

WazirX customers on the social media platform X have bombarded CEO Shetty with prayers, pleas, threats, and insults. Many are worried that the current period of rising crypto prices​ will be over by the time crypto withdrawals are enabled again. Others need their money for day-to-day expenses.

JfWU identified several issues in WazirX’s security protocols. Due to the complexity of the breach and how the funds were compromised, these anomalies might point to internal collaboration within the company rather than just an external hacking incident. 

🚨Full Story of the #WazirX Hack: Uncovering the Events 1.5 Hours Before the Attack, Involving #WazirX’s 5 Key Signatories – Mr. Nischal (who held 2 signatures), Mr. Sumit Patel, Mr. Tushar Patel, and Mr. Rohit Patel – and At least 10 Critical Transactions Signed by #WazirX and… pic.twitter.com/YcEig16ie4

— Justice for WazirX Users (@IndiasCrypto) September 12, 2024

According to JfWU, the hacker opened an account with the crypto exchange platform using fake KYC information, depositing cryptocurrency and eventually converting it into GALA tokens. On July 18, the day of the hack, the individual began withdrawing the GALA tokens, draining the crypto exchange’s hot wallet and forcing the exchange to move more tokens from cold storage, managed by custodial provider Liminal.

JfWU raised concerns about the crypto exchange’s decision to store half of the user’s funds in a single cold storage wallet. They also highlighted that the hacker appeared to deliberately target GALA tokens, which led to the cold storage sweep. According to JfWU’s analysis of the situation, making such precise changes to the cold wallet’s smart contract would likely require insider assistance.

JfWU has now advised affected users to file criminal complaints so that the Central Bureau of Investigation (CBI) can conduct an official investigation into the matter.