WazirX Hack: $230 Million Stolen, Hackers Launder Loot

Author

Finixyta
September 19, 2024

WazirX Hack: $230 Million Stolen, Hackers Launder Loot

Alright, folks, grab your popcorn because we're diving into a real-life crypto heist story that's got more twists and turns than a Hollywood blockbuster. Today, we're talking about the WazirX hack, where a whopping $230 million in cryptocurrencies were stolen. Buckle up, because this tale involves hackers, crypto mixers, and a whole lot of drama.

The WazirX Hack: A Timeline of Events

The Initial Attack

In July 2024, the Indian crypto exchange WazirX fell victim to a massive hack. The attackers managed to siphon off $230 million in various cryptocurrencies. The bulk of the stolen funds consisted of $100 million in Shiba Inu (SHIB) and $52 million in Ether (ETH). This heist accounted for over 45% of the exchange's reserves at the time.

The Aftermath

Following the hack, WazirX entered a restructuring process to address the security breach and recover from the financial blow. The company's founder, Nischal Shetty, claimed that the responsibility for securing the funds lay with Binance. However, Binance vehemently denied any involvement or control over WazirX, stating that they had never owned, controlled, or operated the exchange.

The Laundering Begins

Fast forward to September 2024, and the hackers are now attempting to launder their ill-gotten gains. According to data from Arkham Intelligence, the hackers have moved a significant portion of the stolen ETH to the privacy service Tornado Cash. On Thursday, they transferred 5,000 ETH (worth around $12 million) to Tornado Cash, bringing the total amount moved since Monday to 15,000 ETH (approximately $36 million).

The Role of Tornado Cash

Tornado Cash is a crypto mixer that operates on the Ethereum blockchain. It allows users to transfer cryptocurrencies anonymously by obscuring the transaction trails. Think of it like a high-tech money laundering machine—it takes your dirty crypto and spits out clean, untraceable funds.

The Remaining Funds

Despite the hackers' efforts to launder their loot, there are still cryptocurrencies worth around $50 million sitting in their wallets. Additionally, WazirX reports that 1,475 Bitcoin remain on the exchange's wallets.

The Blame Game: WazirX vs. Binance

Nischal Shetty's Claims

Nischal Shetty, the founder of WazirX, has been vocal about his belief that Binance should be held responsible for the security breach. He argues that Binance had a role in managing the exchange's security, and therefore, they should be accountable for the stolen funds.

Binance's Response

Binance, on the other hand, has categorically denied any involvement with WazirX. In a statement, Binance accused WazirX and Shetty of misleading customers and the market about the relationship between the two companies. Binance emphasized that they had never owned, controlled, or operated WazirX, either before, during, or after the July 2024 attack.

The Call for Accountability

Binance has called on the WazirX team, under the names Zanmai and Zettai, to be transparent and accountable to their users. They demand that WazirX compensate users for the funds lost under their management.

The Impact on the Crypto Market

Market Reaction

The WazirX hack was one of the largest crypto heists of the year, second only to the $300 million attack on the Japanese exchange DMM. The incident sent shockwaves through the crypto market, highlighting the ongoing security challenges faced by exchanges.

Bitcoin Price Movement

Despite the hack, the price of Bitcoin has remained relatively stable, with a 5.90% increase to $63,300.28. This resilience demonstrates the market's growing confidence in the long-term potential of cryptocurrencies, even in the face of significant security breaches.

Practical Advice for Crypto Investors

Do Your Own Research (DYOR)

As always, it's crucial to do your own research before investing in any cryptocurrency or exchange. Don't rely solely on the promises and claims made by companies. Take the time to understand the technology, the market, and the potential risks and rewards.