Breakthrough in WazirX’s Recovery Efforts
Indian crypto exchange WazirX has frozen $3 million in USDT, marking its first major success in recovering assets from a devastating $230 million security breach that occurred in July 2024. The recovery effort is part of the exchange’s ongoing “restructuring proceedings”, which aim to trace and retrieve stolen funds.
The incident compromised 45% of WazirX’s reserves, triggering extensive legal proceedings and recovery operations across multiple jurisdictions.
Details of the July 2024 Hack
The attack primarily targeted Ethereum-based ERC-20 tokens stored in hot wallets. By August 2024, the Singapore High Court granted WazirX’s parent company, Zettai Pte Ltd, a four-month moratorium to restructure its liabilities.
Key Developments:
- CoinSwitch Lawsuit: Rival exchange CoinSwitch filed a lawsuit over $9.7 million in locked funds, including various ERC-20 tokens.
- Arkham Intelligence Analysis: Analysts tracked $50 million of the stolen funds moving through Tornado Cash, with laundering activities accelerating in subsequent months. The largest transfer of $10 million in ETH occurred on September 25, 2024.
- Transparency Initiative: In October, WazirX announced plans to disclose 240,000 wallet addresses and balances in a court affidavit to enhance transparency during its restructuring efforts.
Attribution to North Korea’s Lazarus Group
A joint statement from the U.S., Japan, and South Korea this week attributed the WazirX hack to North Korea’s Lazarus Group, a notorious cybercrime syndicate.
The statement condemned the group for exploiting crypto platforms to fund “unlawful weapons of mass destruction and ballistic missile programs” and emphasized the global threat these attacks pose to the international financial system.
Ranked Among the Largest Hacks of 2024
The WazirX breach ranks as the third-largest crypto hack of 2024, following:
- DMM Bitcoin: $308 million stolen.
- PlayDapp: $290 million stolen.
Looking Ahead
WazirX’s recovery efforts remain ongoing, with co-founder Nischal Shetty confirming plans to reopen trading by February 2025. The freezing of $3 million in stolen assets marks significant progress in what remains a challenging recovery operation for one of India’s most prominent crypto exchanges.
