- WazirX froze $3 million in USDT linked to a $230 million breach targeting Ethereum-based tokens.
- Investigators linked the breach to North Korea’s Lazarus Group, tracing $50 million through Tornado Cash.
- The Delhi High Court reviewed WazirX practices as recovery efforts highlighted security concerns in crypto markets.
WazirX has frozen $3 million in USDT that is linked to a $230 million breach reported in July last year. Investigations revealed that 45% of the exchange’s reserves were compromised in the incident. Hackers primarily targeted Ethereum-based ERC-20 tokens stored in the platform’s hot wallets.
Recovery Efforts and Legal Developments
WazirX has been working to recover stolen funds and regain investor trust. In November, co-founder Nischal Shetty announced plans to reopen trading by February. The exchange introduced a Recovery Token scheme to address user claims. Tokens were distributed based on affected users’ platform balances. This step aimed to compensate users and rebuild trust.
In August 2024, the Singapore High Court granted a four-month moratorium to Zettai Pte Ltd, WazirX’s parent company. This moratorium allowed the company to restructure liabilities related to the breach. As part of its restructuring, WazirX plans to disclose 240,000 wallet addresses and balances in a court affidavit.
Links to North Korea’s Lazarus Group
A recent joint statement from the U.S., Japan, and South Korea linked the attack to North Korea’s Lazarus Group. The group has a history of targeting financial institutions. The countries have called for stricter sanctions to prevent similar crypto-related breaches. Investigators tracked $50 million of stolen funds laundered through Tornado Cash, a privacy mixer. In September, $10 million in ETH was traced as part of these transactions.
Regulatory Concerns and Platform Accountability
The breach raised significant questions about the platform’s security. Justice Sachin Datta of the Delhi High Court highlighted WazirX’s potential financial responsibility. However, the Reserve Bank of India clarified it does not govern cryptocurrency platforms.
The Delhi High Court also reviewed a petition urging a special investigation team to examine WazirX’s practices. Critics argue the absence of regulations exposes broader risks to the financial system.
WazirX continues its recovery efforts while addressing regulatory and legal challenges. The breach exposed vulnerabilities in the cryptocurrency market hence the need for stricter oversight and stronger security measures.
