A hacker linked to North Korea has converted a significant portion of the $230 million stolen from WazirX into Ethereum (ETH), now holding $200 million in the cryptocurrency. This security breach has critically impacted the liquidity and pricing of listed cryptocurrencies on the WazirX exchange, leading to a drastic 40% drop in the exchange’s WRX token value over the last 24 hours.
Impact on Listed Cryptocurrencies
Blockchain tracking service Lookonchain disclosed that the hacker currently possesses 59,097 ETH valued at $200 million, in addition to $15 million in other cryptocurrencies. As a result, cryptocurrencies listed on WazirX are being traded at substantial discounts compared to their global and local prices, highlighting the exchange’s weakened liquidity and increased selling pressure. For example, the Bitcoin/rupee trading pair plummeted by 22% over the last 24 hours, while similar pairs on other Indian exchanges like CoinDCX and Zebpay saw only minor declines.
Why Did the Hack Occur?
The hack, which took place on July 18, targeted one of WazirX’s multisig wallets, resulting in the theft of over $100 million in Shiba Inu and $52 million in Ethereum, among other assets. The stolen funds constituted more than 45% of the exchange’s total reserves as of June 2024, deeply undermining user trust and recovery prospects. WazirX attributed the breach to a discrepancy between the data on Liminal’s interface and the actual signed information, with the payload being manipulated to transfer control to the hacker. However, this explanation has been met with skepticism within India’s cryptocurrency community.
Concrete Inferences for Users
Key Takeaways for Users
– Regularly review exchange security protocols before investing.
– Prefer exchanges with robust security measures and compliance practices.
– Stay informed about market trends and fluctuations affecting listed cryptocurrencies.
– Diversify investments to mitigate risks associated with exchange-specific breaches.
In response to the cyberattack, WazirX temporarily suspended both cryptocurrency and fiat withdrawals, raising broader concerns about the exchange’s security protocols and trustworthiness. This incident could lead to lasting repercussions for India’s cryptocurrency market, affecting investor confidence and market stability.