The hacker behind the July 18 attack on India’s biggest exchange WazirX has moved $6.5 million worth of Ethereum to a crypto platform being criticized as a willing tool in aiding scams in the industry.
The WazirX hacker moved 2,600 ETH to the United States-sanctioned cryptocurrency mixer Tornado Cash in an attempted move to launder the funds.
The transaction was picked up by Blockchain Security Firm Peckshield and its details were shared on their X page.
“ #PeckShieldAlert #WazirX Exploiter -labelled address has transferred 2600.1 $ETH (worth ~$6.5M) to #Tornadocash within the last 9 hours On July 18, India’s #CEX WazirX suffered a major security breach, resulting in the theft of over $230 million in cryptos.” Peckshield Tweeted
Funds sent to a mixer make it hard for blockchain security experts to track and recover and crypto mixers like Tornado Cash have come under fire for being a willing tool aiding crypto scams in the industry.
WazirX attack
On July 18, India’s biggest cryptocurrency exchange suffered an attack that led to the loss of $230 million in crypto assets. The bulk of the stolen assets were in Ethereum and the hacker quickly moved the funds to other wallets to evade capture.
The particular structure of the WazirX platform that was attacked is its multi-Signature wallets which it holds in partnership with Linea. The tragic loss has led to a rift between WazirX and Linea over whose side of the partnership was exploited by the hackers.
Wazir X claimed that the loss has affected its ability to maintain balanced collateral against its assets.
Social loss strategy
In response to the attack and loss incurred by Wazir X, the team attempted a social loss strategy to minimize the impact of the loss on the project. The strategy seeks to share the loss amongst all clients of the WazirX Exchange and reduce the impact of the loss on the platform.
This strategy was met with stiff resistance by clients of the exchange who argued that clients should not take responsibility for losses on a crypto exchange. They urged the team to look for other alternatives as the social loss strategy was flawed. After much back and forth between the founder of WazirX and their community on X. The plan was shelved.
What to Know
- Trading on the WazirX platform has been paused since July 21 as the WazirX team focuses on partial recovery in the meantime. Users might not get the full value of the cryptocurrency assets they possessed before the attack.
- WazirX’s team has set up a bounty for any ethical hacker who can help recover the funds with a promise of 10% of the total stolen assets.
Leave a Comment