Cryptocurrency Exchange WazirX Hacked for $230M, North Korea Suspected

• Indian cryptocurrency exchange WazirX suffered a major security breach, losing over $230 million in assets.
• The attack targeted a multisig wallet, leading to the unauthorized transfer of funds.
• Blockchain security firm Elliptic suggests North Korean hackers are likely behind the breach.
• Stolen assets include $100 million worth of Shiba Inu (SHIB) tokens and $52 million in Ethereum (ETH).
• The incident has raised concerns about the security of cryptocurrency exchanges and the involvement of state-sponsored hacking groups.

Introduction

In a significant cybersecurity incident on July 18, 2024, WazirX, a prominent Indian cryptocurrency exchange, fell victim to a wallet exploit resulting in the unauthorized transfer of more than $230 million worth of crypto assets. The attack, which targeted the exchange’s multisig wallet on the Ethereum network, has sent shockwaves through the crypto community and led to substantial market volatility for affected tokens.

The Hack and Its Aftermath

The attacker managed to upgrade the implementation of the Safe Wallet to a malicious contract, enabling them to drain the funds. Yajin Zhou, co-founder of Blocksec, explained that the leaked private keys were used to upgrade a safe multi-sig wallet holding a large number of assets to a malicious contract, which was then used to drain most of the assets in the Safe Wallet.

WazirX has acknowledged the security breach and has temporarily paused all withdrawals, including both cryptocurrency and Indian Rupee (INR), as they investigate the incident. On-chain data reveals that over $100 million in Shiba Inu (SHIB) was taken, along with 15,290 ETH (valued at approximately $52 million), and 20 million MATIC tokens (worth about $11 million).

North Korea’s Suspected Involvement

Blockchain security firm Elliptic has suggested that North Korean hackers are likely behind the breach. The firm’s analysis identified that around $235 million in cryptoassets were lost in this breach. This incident adds to the growing list of cyberattacks attributed to North Korea, raising concerns about the involvement of state-sponsored hacking groups in cryptocurrency theft.

Market Impact and User Reactions

The hack has had a significant impact on the cryptocurrency market, with affected tokens experiencing substantial volatility. The bitcoin-rupee (BTC/INR) pair, for instance, has declined by 11% to 5.1 million rupees ($60,945) on WazirX, trading at a substantial discount compared to rival exchange CoinDCX, where it was priced at 5.7 million rupees.

Users of the exchange have expressed their concerns and frustrations on social media platforms, with many calling for increased security measures and transparency from cryptocurrency exchanges. The incident has once again highlighted the risks associated with storing cryptocurrencies on centralized exchanges and the need for robust security measures to protect user funds.

The WazirX hack serves as a stark reminder of the vulnerabilities in the cryptocurrency ecosystem and the potential for significant financial losses. As the investigation continues, it is crucial for cryptocurrency exchanges to prioritize security and implement robust measures to safeguard user funds. The involvement of North Korean hackers also highlights the need for international cooperation in combating state-sponsored cyberattacks and protecting the integrity of the global financial system.