WazirX exchange was hacked for $230 million. Relevant departments have intervened and assisted in recovery operations

In a statement on Friday, WazirX exchange announced that it is taking further legal action in response to the recent cyberattack that resulted in over $230 million in losses. WazirX’s immediate action plans include tracking stolen funds, recovering customer assets, and conducting in-depth analysis of the cyber attack.

The exchange has reported the incident to the Financial Intelligence Unit of India (FIU-India) and the Computer Emergency Response Team of India (CERT-IN) and has worked with more than 500 exchanges to block addresses related to the attack. The WazirX team stated that they are actively working with numerous exchanges to obtain additional resources to assist in their recovery efforts.

WazirX is working closely with digital forensics experts and law enforcement agencies to identify the attackers and is focusing on the recovery of funds and digital forensic analysis of the attacks. On Thursday, WazirX disclosed a cyberattack on one of its multi-signature wallets, which resulted in the theft of more than $230 million. As a precautionary measure, WazirX has suspended all withdrawal services for Indian rupees and cryptocurrencies.

According to WazirX, the attackers exploited the discrepancy between the data displayed by the wallet interface and the actual transaction details to steal funds. The value of Shiba Inu’s SHIB tokens fell by 8% following the attack, which at the time had approximately $100 million worth of SHIB in the attacker’s wallet. The attackers then converted some of the altcoins into Ethereum (ETH). Data from Arkham Intelligence shows that the wallet currently holds 43,800 ETH, worth approximately $153 million.

Blockchain analysis company Elliptic pointed out that this cyber attack on WazirX may be related to North Korean hackers. This incident highlights the challenges faced by cryptocurrency exchanges in terms of security protection, and also reminds regulators of the need to strengthen supervision and guidance in this emerging field.

A wake-up call for cryptocurrency regulation in India

The hack of WazirX not only exposed the exchange’s security vulnerabilities, but also highlighted India’s shortcomings in cryptocurrency regulation. Joanna Cheng, associate general counsel at Fireblocks, noted that the incident highlights the need for clear security standards, risk management and consumer protection guidelines.

Cheng stressed that although India does not yet have cryptocurrency-specific regulations, a clear regulatory framework is urgently needed for the development of the cryptocurrency industry. She believes that such regulation would not only set standards of conduct for exchanges but also ensure that they are accountable to their customers. She said in an interview with the media: "The intervention of supervision will make exchanges bear corresponding responsibility for their actions or inactions, which is crucial to protecting consumers."

Cheng also questioned WazirX's characterization of the hack as a "force majeure event." She noted that the applicability of a force majeure clause depends on whether the event is truly unexpected and unavoidable. The force majeure clause may not apply if WazirX could have taken steps to prevent or mitigate the attack. She added: "If WazirX could have reasonably prevented or mitigated the attack, then they cannot invoke the force majeure clause to exclude liability."

Cheng further noted that WazirX attempted to use a force majeure clause to suspend withdrawals, but if the attack was foreseeable and could have been avoided or mitigated by reasonable precautions, then the clause cannot be used as an excuse to evade liability. She concluded by adding: “This incident highlights the importance of regulatory clarity and oversight, which are critical to establishing basic accountability mechanisms and protecting investors.”

Through this incident, both Indian regulators and the cryptocurrency industry should realize the importance of strengthening supervision and improving security standards to ensure the healthy development of the industry and the protection of consumers’ rights and interests.

Conclusion:

The WazirX hacking incident is not only a test for a single exchange, but also a warning to the entire cryptocurrency industry. It reminds us that as cryptocurrencies gain popularity and grow, more stringent security measures and regulatory systems must be established.

Only in this way can we ensure the sustainable development of the industry, protect the interests of consumers, and promote a healthy and transparent market environment.

At the same time, regulators in India and other countries must take action to develop and implement effective policies to address the evolving risks and challenges in the cryptocurrency space.

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