Indian authorities have arrested SK Masud Alam, a resident of West Bengal, in connection with the $230 million WazirX hack that occurred earlier this year. Alam allegedly created a fake account under the alias Souvik Mondal, which he reportedly sold to the hacker via Telegram. This account was later exploited to breach the exchange, resulting in severe losses for WazirX customers who could not access their funds.
The hack, which occurred on July 18, targeted a multi-signature wallet with six signatories, five from WazirX and one from its security partner, Liminal Custody. As it emerged from the reports on the firm, Liminal failed to produce essential information requested by the authorities, raising questions about the security measures they have put in place. According to the company, WazirX had stored around 25 to 30% of its total asset value on the hacked exchange.
In response, WazirX implemented a recovery plan ten days after the hack, offering to return 55% of affected users’ holdings, with the remaining 45% issued in USDT-equivalent tokens. Also, the exchange provided a $23 million bounty for the return of the stolen money and a $10,000 USDT for leads that would lead to intelligence on the digital thieves.
Also Read: WazirX Faces Security Breach as $235 Million in Funds Moved Suspiciously
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User Frustration Peaks as Bull Market Surges
As the crypto market experiences a significant bull run, WazirX customers have grown increasingly frustrated. Due to their inability to sell their assets, affected users are sitting precariously watching their potential earnings slide. On the market, Bitcoin has hit a high of $90,000 but users of WazirX with funds tied up in this investment cannot partake in this upward run, as recently highlighted by crypto researcher Budhil Vyas.
To address user concerns, WazirX introduced a “rebalancing calculator” to help users understand credited balances, but it has sparked criticism. Some users claim they’re being refunded with unaffected tokens, while others allege that the exchange has recovered its losses yet continues to withhold user funds.
Ultimately, the WazirX hack underscores significant security challenges in the crypto space, with customers left in a difficult position as recovery efforts continue amidst a surging market.
Also Read: WazirX Launches $23 Million Bounty Program to Recover Stolen Crypto Assets
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.