- WazirX hack shows the weaknesses of the multi-signature security system, which is $230 million stolen.
- July saw several massive crypt heists, which highlighted increasing security risks.
- Such platforms feel the heat to improve on the security measures in place to guard digital resources.
With cryptocurrencies expansion popping with success stories of one being created every second, some bad news could not be farther behind, and in a month full of jarring hacks targeting cryptocurrencies, it is Indian exchange WazirX that has been left counting the heaviest losses in the form of $230 million.
This event alone accounted for 86.4% of the total cryptocurrency stolen during the month, making it one of the most devastating hacks in the history of digital assets.Such occurrences add to the series of successful digital asset thefts in July and testify to the ongoing and significant security issues in the cryptocurrency space.
Anatomy of the WazirX Breach
The hack of WazirX, which was detected on July 28, was a multi-step attack on the exchange’s hot wallets. Early investigations point to the fact that the hackers managed to infiltrate the platform through its multi-signature security feature, enabling them to steal the money without necessarily raising the alarm. The stolen assets mainly included Ethereum and many other tokens belonging to the ERC-20 standard.
WazirX officials have come out to explain that they are cooperating with blockchain forensics companies to track the stolen money. Similarly, WazirX, also came up with a recovery plan, that gives users full access to 55% of their holdings as they continue to seek to retrieve the rest of the money. It has also put on hold transactions such as withdrawals and deposits for some time as it undergoes security checks.
Other Precedent Crypto Thefts
Unfortunately, the Terra blockchain was hit by a reentrancy attack on July 31st causing the loss of around $4 million in various tokens. The attack took advantage of a known vulnerability that was repeated after an update had been done. In response, the Terra developers decided to freeze the blockchain for several hours and upgrade it to avoid similar occurrences.
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However, significant breaches also happened in the month of July apart from the WazirX breach. Compound Finance, a DeFi platform, was drained of $24 million, as well as the bridging protocol LI. FI was shocked to learn that $10 million had been stolen.
Smaller hacks impacted Bittensor and Rho Markets, where the latter two reportedly lost $8 million. Some of the stolen money was further transferred through cryptocurrency tumblers such as Tornado Cash, making it difficult to track such money. While exchanges and platforms face more advanced attacks, investors and regulators demand better protection of digital assets.
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