Indian crypto exchange WazirX reveals details about major security breach causing theft of over $230 million

Indian cryptocurrency exchange WazirX has revealed further details about a major security breach affecting one of its multisig wallets. The attack, which resulted in the loss of over $230 million, was acknowledged in a statement on X (formerly Twitter) and has led to a temporary suspension of all withdrawals to ensure the safety of remaining assets.

According to the WazirX's 'Preliminary report', the compromised wallet had been using Liminal’s digital asset custody and wallet infrastructure since February 2023. According to the report, this wallet required approvals from six signatories (people who approve transactions) – five from WazirX and one from Liminal. To complete a transaction, three WazirX signatories and the Liminal signatory had to approve it. They also had a security rule allowing transactions only to pre-approved addresses.

How did the hack happen?

The attackers managed to exploit a gap between what was shown on Liminal’s interface and what was actually happening in the transaction. They altered the transaction to gain control of the wallet, bypassing the security measures.

WazirX's response

WazirX claimed that even though it had strong security systems in place, the hackers got through. The exchanges is now trying to block any further deposits and is trying to recover the stolen funds. 

Liminal's Statement

Liminal, in an earlier statement, clarified that their system was not breached. They said the compromised wallet was created outside their system, and all wallets within their platform are safe.

What are Multisig Wallets?

Multisig wallets require multiple private keys to approve transactions, adding an extra layer of security. However, in this case, the hackers managed to bypass this security.

What next?

WazirX claims it is dedicated to resolving this issue and recovering the stolen funds. They have promised to be transparent with their users and keep them informed as they learn more.