Insights by: John Parsaie & Sumit Kochar
WazirX, India’s largest cryptocurrency exchange, was victimized by a major cyber-attack that resulted in the loss of $230 million in funds. As part of its initial damage control strategy, the exchange proposed a loss-sharing plan that would distribute the impact of the loss among all of its users. However, the plan elicited a strong negative response from the community, leading to WazirX’s abandoning it and launching a public poll on July 27th to gather feedback.
The outcome of the poll would inform the exchange’s decision-making process in dealing with the incident, but founder Nischal Shetty emphasized that it was not a legally binding process. The co-founder described the hack as an extensive cyber-attack and called on the community to exercise patience as they work towards a resolution.
With the situation still unresolved, WazirX filed a police complaint on July 19th, the day after the hack, and filed a first information report (FIR) on August 5th as part of efforts to recover the stolen funds. The exchange revealed that it had lost 45% of its holding crypto assets in the theft and expressed full confidence in the investigating agencies.
On August 6th, WazirX announced a public offer, promising 10% of the lost funds as a reward to white hat hackers who could facilitate the recovery of the stolen funds and reactivate the platform. However, this initiative could pose significant risks because it invites bad actors to exploit existing vulnerabilities in the WazirX platform and potentially lead to the loss of more funds. Furthermore, there is no guarantee that the “bounty hunters” would take only 10% of the recovered funds. In light of these concerns, it is our professional opinion that WazirX should engage the services of a reputable cybersecurity firm with a proven track record of recovering stolen cryptocurrency assets. From 2021 alone, Blackwater has successfully recouped over $100 million worth of stolen assets and cryptocurrency.
Due to a lack of transparency and action, some WazirX users have reportedly contacted us seeking help in recovering their portions of the stolen funds independently of the exchange.
Meanwhile, WazirX has temporarily paused withdrawals and trading on its platform while it actively works on finding a resolution to the crisis. With nearly 33 percent of India’s crypto users as account holders, the ongoing efforts to recover the stolen funds and restart the exchange’s operations have significant implications for the broader Indian crypto community.
If you have any assets that have yet to be recovered and require assistance, please do not hesitate to contact us at +971 54 359 9929 or email us at contact@dolcevitaadvisors.com. We are committed to providing the necessary support to help you navigate this challenging situation and work towards recovering your lost assets.
