WazirX, an Indian cryptocurrency exchange, filed a First Information Report (FIR) with the Delhi Police in response to a significant security breach it suffered in mid-July 2024. The breach, which resulted in the theft of approximately $234.9 million in cryptocurrencies such as Shiba Inu (SHIB), Ether (ETH), Matic (MATIC), and Pepe (PEPE), has led to an investigation by the Delhi Police’s Intelligence Fusion & Strategic Operations (IFSO) unit.
The filing of the FIR has sparked mixed reactions within the community, with some questioning the delay in filing and others recognizing the complexity of the investigation. WazirX’s co-founder, Nischal Shetty, has emphasized the exchange’s commitment to transparency and recovery.
The initial investigation by WazirX revealed that their own infrastructure was not compromised, suggesting that the breach may have originated from their wallet infrastructure provider, Liminal. However, conflicting reports have emerged, with each party pointing to the other as the potential source of the security lapse.
Liminal defended its security measures, emphasizing the sophistication of the exploit, which involved an externally created wallet. The complexity of the breach has led to speculation that North Korean hackers might be involved, raising concerns about the increasing threat of state-affiliated cyber attacks on cryptocurrency exchanges.
WazirX Files FIR Over $234.9 Million Crypto Theft Amid Investigation
The market reacted swiftly to mitigate the impact of the breach. Shiba Inu (SHIB) holders, who lost $5.43 billion worth of tokens, responded by significantly increasing the burn rate of SHIB tokens to prevent the attacker from dumping the stolen assets.
In addition, CoinDCX, a leading Indian crypto exchange, established a $5.9 million Crypto Investors Protection Fund (CIPF) to safeguard its users’ assets against similar security incidents. The creation of the CIPF reflects the growing recognition of the need for higher security standards within the Indian crypto ecosystem in response to increasingly sophisticated cyber threats.
The WazirX breach highlights the growing maturity of the Indian crypto market and the broader crypto economy in dealing with sophisticated cyber attacks. The swift response from the market, including the increased burn rate of SHIB tokens and the establishment of the CIPF by CoinDCX, demonstrates a proactive approach to addressing the fallout from such incidents.
The ongoing investigation by the Delhi Police and the efforts to recover the stolen assets underscores the importance of robust security measures and the need for continued vigilance in the face of evolving cyber threats.
The WazirX breach serves as a stark reminder of the vulnerabilities that exist within the cryptocurrency ecosystem and the need for continuous improvement in security practices. The FIR filed by WazirX and the subsequent investigation represents important steps toward holding the perpetrators accountable and recovering the stolen funds.
The market’s response, including the actions taken by SHIB holders and CoinDCX, reflects a growing awareness of the need to protect against future attacks and build a more secure and resilient crypto ecosystem.
