The arrest of a guy by Delhi Police in relation to the Rs 2,000-crore cryptocurrency theft on WazirX, one of India’s top cryptocurrency exchanges, is a major development. Through the creation of a fake account on the site that was later sold to another person, the accused, known as SK Masud Alam, allegedly contributed to the attack. WazirX’s digital assets were massively stolen as a result of this incident, highlighting the weaknesses in the expanding cryptocurrency market.
Arrest Made After Investigation Into Crypto Theft:
The arrest came after a thorough investigation by the Special Cell of Delhi Police, namely the Intelligence Fusion and Strategic Operations (IFSO) branch, which has been investigating the July 18, 2024, cybercrime. Under the alias Souvik Mondal, Alam, a resident of West Bengal, created a fake account on WazirX. Following that, this account was sold to M Hasan, a suspect who is thought to have carried out the cyberattack using it. Due to the breach, digital assets from the exchange’s hot wallet—which is intended to give users instant access to money—were transferred without authorization.
WazirX Partners Under Scrutiny:
Delhi Police found issues with WazirX’s partner, Liminal Custody, a company in charge of protecting the exchange’s wallets, over the course of the investigation. Liminal refused to comply completely in spite of repeated demands from authorities, hiding important information that would have made it easier to identify the attackers. Since authorities intend to address Liminal Custody’s role in a supplemental chargesheet, this lack of transparency has caused a considerable delay in the inquiry.
Police seized three laptops from WazirX, which were used by authorized signatories to authorize transactions, in addition to arresting Alam. These laptops are essential for comprehending how multi-signature wallets, which need several keys to allow a transaction, are abused. There is proof of both local and remote illegal access to WazirX’s internal systems.
Crypto Theft Raises Alarm in the Industry:
The wider cryptocurrency community is concerned about the attack on WazirX, which resulted in the theft of over $230 million (about Rs 2,000 crore) worth of cryptocurrency. The exchange’s hot wallet was the main target of the breach, which depleted about 45% of its assets. Because the cold wallet holds assets offline, it is more secure, and investigators think the attackers tried to access it as well.
Following the hack, WazirX, a platform that makes it easier to purchase, sell, and trade cryptocurrencies like Bitcoin and Ethereum, has completely cooperated with authorities. To help with the inquiry, the exchange has supplied vital information such transaction logs and Know Your Customer (KYC) records. Despite the difficulties caused by the cyberattack, WazirX, which was launched in 2018, is still in operation and is integrated with Binance, a worldwide cryptocurrency exchange.
Stronger security procedures are required in the bitcoin business, as demonstrated by the heist and the inquiry that followed. The hack also highlights the dangers that cybercriminals pose to digital assets, particularly when interacting with exchanges that hold substantial quantities of cryptocurrencies.
Conclusion:
A clear reminder of the weaknesses in the cryptocurrency ecosystem, especially with regard to exchanges that handle and hold user cash, is provided by the WazirX robbery. Although SK Masud Alam’s arrest is a significant milestone in the fight against the cyberattack, there is still much to learn, particularly about the role played by third-party custodians like Liminal Custody. The cryptocurrency sector will be closely monitoring the probe in the hopes of more regulatory control and enhanced security measures to stop such occurrences in the future.
