Indian crypto exchange WazirX is under scrutiny after a $234.9 million transaction to an unknown wallet. Blockchain security firm Cyvers first detected this transaction, which originated from WazirX’s Safe Multisig wallet on the Ethereum network.
There are fears of a security breach because the new wallet was initially funded by the crypto mixer – Tornado Cash.
WazirX Suffers Hack
Cyvers expressed concerns that the WazirX Safe wallet may have been compromised by a potentially malicious entity. After the transfer, the suspicious address began a series of cryptocurrency swaps.
“The suspicious address has already swapped PEPE, GALA, and USDT to ETH and continues to swap other digital assets,” a Cyvers report noted.
This activity raises red flags, suggesting a possible attempt to launder the assets through various cryptocurrencies.
Read more: Crypto Project Security: A Guide to Early Threat Detection
In an email conversation with BeInCrypto, WazirX confirmed the security breach. Moreover, for the time being, the crypto exchange has paused fiat and crypto withdrawals. Notably, this incident is the second largest crypto hack of 2024, after the DMM Bitcoin security breach in May.
“We’re aware that one of our multisig wallets has experienced a security breach. Our team is actively investigating the incident. To ensure the safety of users’ assets, INR and crypto withdrawals will be temporarily paused,” WazirX told BeInCrypto.
Moreover, Deddy Lavid, CEO of Cyvers, shared insights with BeInCrypto that hint at a notorious perpetrator.
“The use of TornadoCash to fund the transactions is indicative of methods used in previous high-profile attacks. While it is too early to definitively link this incident to the Lazarus Group, the similarities are concerning. Cyvers is closely analyzing the situation,” Lavid told BeInCrypto.
Lazarus, a notorious hacking group believed to receive sponsorship from North Korea, has carried out several major cryptocurrency thefts. Notably, it is also responsible for stealing over $305 million from the Japanese crypto exchange DMM Bitcoin.
Other industry experts also voiced their opinions on the incident, noting the rise in hacks and the need for timely action.
“I believe the recent security breach at WazirX really highlights the critical need for crypto exchanges to continuously strengthen their security protocols. Regular and comprehensive security audits by third-party experts are crucial to identify vulnerabilities. Implementing advanced threat detection systems that use AI for real-time monitoring can help detect suspicious activities. Additionally, keeping the majority of funds in cold storage, which is offline, reduces the risk of hacks,” Akshay Nassa, founder of Chimp Exchange, shared with BeInCrypto.
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