Delhi Police Arrest WazirX Suspect in ₹2,000 Crore Crypto Hack

Highlights:

• Police arrest WazirX suspect, uncovering a vital lead in the ₹2,000 crore cryptocurrency heist.
• The arrested suspect allegedly facilitated the hack using a fake WazirX account sold on Telegram.
• Liminal Custody, which was in charge of securing WazirX’s wallets, allegedly refused to comply with the investigation. 

Delhi Police have arrested a suspect from West Bengal in connection with a massive crypto hack on WazirX, one of India’s leading cryptocurrency exchanges. SK Masud Alam, identified as the suspect, allegedly facilitated and created a fake account to aid the ₹2,000 crore theft.

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According to local reports, the Delhi Police’s Intelligence Fusion and Strategic Operations (IFSO) division caught Alam. Authorities accused him of creating a WazirX account under the false name ‘Souvik Mondal’ and then selling it to another user named M Hasan over Telegram. Hassan then used this account to breach WazirX’s security mechanisms.

BREAKING: 🇮🇳 Delhi Police arrested man from West Bengal in connection with Rs 2,000 crore WazirX hack

— Crypto India (@CryptooIndia) November 14, 2024

Significant Crypto Theft Shakes the Industry

On July 18, WazirX was the target of a cyberattack, which resulted in the loss of over $230 million (roughly ₹2,000 crore) in digital assets, accounting for about 45% of its total holdings. The hackers attacked both exchanges’ hot wallets and attempted to break into the cold wallet, which holds funds offline and has stricter security features.

WazirX shared KYC details and data regarding transaction logs of the stolen funds with authorities to help them trace the stolen funds. Three laptops were also confiscated from the WazirX signatories, who confirmed transactions through multi-signature wallets.

Non-Cooperation from Liminal Custody

The chargesheet alleges that WazirX’s company, Liminal Custody, which offered digital wallet security through its terms of use, failed to cooperate as promised. Even after multiple notices, Liminal Custody allegedly failed to provide essential information to the investigations. This is worrying for the firm’s safety and degree of accountability.

Liminal Custody’s failure to cooperate has prevented the police from putting together the full chain of events in the cryptocurrency heist. The investigation will include another chargesheet, and authorities will further investigate liminal Custody’s involvement.

Effects on Users and Ongoing Investigation

WazirX users have been annoyed and concerned about the massive heist and the safety of their funds. Indian crypto researcher Budhil Vyas wrote on X that the affected consumers are not getting anything out of the current crypto market surge. This not only makes affected users unable to withdraw their funds, but it also frustrates them.

Bull Run is HERE but #WazirX users can only watch 👀

Market up 50%+ since the hack. $BTC hitting 90k ATH but kya faida when funds are frozen?

Meanwhile our govt:

Taking 30% tax ✅
Charging 1% TDS ✅
Zero action on WazirX case ✅

FM really is like: "Mujhe fark nahi padta"… pic.twitter.com/sljNe69DNE

— Budhil Vyas (@BudhilVyas) November 13, 2024

The arrest of the WazirX suspect is a major step in one of India’s biggest crypto crimes. Authorities are actively working to identify others involved in the cyberattack and recover the stolen assets.

Increased Scrutiny on Cryptocurrency Security Measures

Such an incident makes authorities investigate the security practices of the cryptocurrency industry. Exchanges are pressured to bolster their security protocols to secure users’ assets. The arrest of the WazirX suspect demonstrates that great security measures and strict regulatory compliance go a long way.

Authorities are calling on all involved to help. Liminal Custody has allegedly been non-cooperative, hindering the investigation’s progress. The police also request that the corporation provide the information needed to trace the stolen assets and hold the responsible parties to justice.

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