One of the largest such heists in India’s digital asset sector, $235 million, was siphoned off in crypto exchange WazirX, and Delhi police have now arrested a suspect. According to India Today, suspect SK Masud Alam, a resident of West Bengal, had allegedly played a key role in providing the hack.
According to authorities, Alam made a fake WazirX account under the name ‘Souvik Mondal’ and then sold it on Telegram to a person identified as ‘M Hasan’ who made the contributions. The amount of money taken from the exchange is so big the perpetrators are suspected of having accessed WazirX’s multi-signature wallet using the fraudulent account.
As part of the investigation, local Delhi police’s Intelligence Fusion and Strategic Operations (IFSO) division approached peer crypto custody provider Liminal Custody which has a hand in securing WazirX’s wallets for support. But the police report says Liminal Custody did not respond to several requests for information, suggesting lapses in its security oversight.
WazirX Loses $235 Million in Cyber Attack
WazirX’s authorized signatories used three laptops to approve transactions, and authorities are seeking to glean the way in which the hack was exploited, with that being three laptops that were seized by authorities.
According to media reports, WazirX has shared that transaction data, ID records, and logs with investigators. According to preliminary findings by the Indian Cyber Crime Coordination Centre, no evidence of unauthorized access to WazirX’s internal systems, either locally or remotely, has been found.
On 18 July, WazirX was hit with a cyber attack that left it in significant financial and reputational damage. The exchange said lost $235 million on its exchange as it had to start a Scheme of Arrangement in Singapore under local insolvency laws.
According to an independent audit conducted by Grant Thornton, there is ‘no evidence that Liminal Custody’s infrastructure has been compromised in any way as a result of this hack,’ according to a tweet by the Liminal Custody team yesterday. However, the probe continues, and the focus is on whether third parties were involved in the incident.
It is a case of growing concerns about security vulnerabilities in crypto exchanges and custodians’ role in protecting digital assets. Industry wants authorities in India to aid it in combating cybercrime raging in the domain of crypto, which is expanding rapidly.
