Indian Govt. Officials Probe Crypto Exchange WazirX’s $234M Hack
Indian government officials are currently investigating a major $234 million hack involving WazirX, one of the country’s largest cryptocurrency exchanges. The incident occurred on July 18, when funds were illegally transferred from the exchange’s Ethereum wallet, wiping out nearly 45% of its total holdings.
Government Investigation Ongoing
Local news publisher Moneycontrol reported that the founders of WazirX were recently questioned by officials from at least three government agencies: the Financial Intelligence Unit, or FIU, the Intelligence Bureau, or IB, and the Indian Computer Emergency Response Team, or CERT-In. The discussions were held within WazirX’s Mumbai office, where the exchange’s leadership shared transaction information along with blockchain addresses tied to the hackers.
This included a team of eight to ten officials also interrogating the executives at WazirX, hoping to understand how the transfer of this much amount was carried out from the wallets of the exchange. An inside job was considered earlier too, but WazirX has ruled out so far any internal foul play. The exchange, nonetheless, is continuing to extend full cooperation with the authorities by sharing logs and other technical details related to the incident.
Security and Regulatory Concerns
The hack has raised red flags within the government over the safety of retail investors in India’s largely unregulated cryptocurrency space. The FIU-tracking suspicious financial activity-has reached out to other crypto stakeholders for information on how such transactions take place and if there are any lacunae in the regulatory framework that might have led to the hack.
WazirX’s Future Plans
In response to the crisis, WazirX’s parent company announced restructuring plans, including the creation of a Committee of Creditors and talks with 11 crypto exchanges for emergency funding. Meanwhile, investigations remain ongoing as the government tries to shore up loopholes in India’s crypto landscape.
