Delhi Police Arrest Key Suspect in $230M WazirX Hack, Platform Adds New Safeguards

• WazirX hack led to $230M loss; Delhi Police nab suspect in key cybercrime case involving fake account sales on Telegram.
• Liminal Custody, WazirX’s digital asset firm, faces scrutiny over alleged lack of cooperation in Delhi Police probe.
• WazirX initiates DEX, OTC, and staking options to generate recovery funds post-$230M hack, aiding affected creditors.

Delhi Police have arrested a man linked to the massive WazirX cryptocurrency exchange hack, a case involving sophisticated cyber tactics and millions in losses. SK Masud Alam, was apprehended on allegations of creating and selling a fraudulent WazirX account, which was later used to breach the exchange’s systems. The hack, which occurred in July, drained over $230 million from WazirX.

Fake Accounts and Telegram Sales Fuel the Cyber Heist

Alam allegedly opened a WazirX account under the false identity “Souvik Mondal” and sold it via Telegram to an individual named M Hasan. According to Delhi Police’s chargesheet, Hasan then used this account to infiltrate WazirX’s infrastructure, compromising a multi-signature (multi-sig) wallet that secured the majority of the platform’s holdings. 

The attack targeted WazirX’s hot wallet, with hackers attempting to access the cold wallet, which holds offline reserves. Investigators, led by the Delhi Police’s Intelligence Fusion and Strategic Operations (IFSO) unit, revealed that multi-sig wallets, a system using multiple keys for transaction authorizations, were central to the hack. 

Three laptops, belonging to WazirX’s authorized signatories, were seized to examine the chain of command during the breach. WazirX has been actively cooperating, providing key information such as Know Your Customer (KYC) details and transaction logs, assisting authorities in their analysis of the hack.

Custody Provider Accused of Non-Cooperation

While WazirX has aided the investigation, the digital asset custody firm, Liminal Custody, has been cited for alleged non-cooperation. The chargesheet states that Liminal failed to provide critical data despite repeated requests. 

This lack of cooperation has reportedly hindered investigators in mapping the complete transaction chain and verifying security measures that may have been compromised. Police stated they would further investigate Liminal’s role, with a supplementary chargesheet anticipated as inquiries continue.

New Measures and Revenue Streams Introduced for Recovery

In response to the breach, WazirX has implemented several new security and financial measures to support affected creditors. The platform introduced additional revenue streams, including a decentralized exchange (DEX), staking, and over-the-counter (OTC) trading options, aiming to generate funds for reimbursement. 

Legal efforts are underway to recover stolen assets, and “White Knight” partnerships are expected to help restore some lost funds. These steps, combined with resumed trading, are intended to restore confidence and assist creditors affected by the breach.