WazirX founders meet with government agencies as probe into $235 million crypto hack starts: Report

WazirX has investigated the possibility of an inside job behind the hack that left it without 45% of its entire holding assets, but with nothing detected so far

WazirX founders have been meeting with eight to ten government officials from the Financial Intelligence Unit (FIU), Intelligence Bureau (IB), and the Indian Computer Emergency Response Team (CERT-In) over the past few weeks with the officials seeking information on the hack and theft of crypto tokens from its wallets this year, according to a Moneycontrol report, which cited an unnamed industry source. HT couldn't independently verify the information.

WazirX, India's largest cryptocurrency exchange with over 1.5 crore users, went through a cyberattack on July 18 resulting in $235 million worth of crypto tokens being stolen from its wallets. This was nearly 45% of its entire holding assets. (Representational Image)

What happened at WazirX this year?

WazirX, India's largest cryptocurrency exchange with over 1.5 crore users, went through a cyberattack on July 18 resulting in $235 million worth of crypto tokens being stolen from its wallets. This was nearly 45% of its entire holding assets.

The exchange has investigated the possibility of an inside job, but no foul play within has been detected so far, the report read.

The hack happened because there are grey areas as the sector is unregulated," Moneycontrol quoted another unnamed source as saying.

What are the details of the government agencies whose officials have met with the WazirX founders?

Among the aforementioned government agencies, the FIU comes under the finance ministry and is responsible for processing and analysing suspect financial transactions. The IB comes under the home ministry and reviews security and counterintelligence. CERT-In deals with cybersecurity threats under the electronics and IT ministry.

What is WazirX doing to fix the issue?

WazirX is currently working with web security firm zeroShadow and financial and risk advisory firm Kroll to trace the stolen assets and also propose recovery methods.

The exchange is also getting restructured to manage the huge liabilities. A 10-member committee of creditors (CoC) will be set up by October 09, 2024. As it is in the moratorium period, it will also publicly disclose wallet addresses, respond to user queries during court proceedings, and also publicly release its financial information.

It may also get bought out, with its Singapore-based parent in talks with 11 other exchanges for such a deal.

WazirX plans to return 52-55% of the crypto assets it still has to clients over the next six months, according to the report.