WazirX Freezes $3 Million in USDT Linked to Security Breach

Highlights:

• WazirX has frozen $3 million in USDT from the $230 million hack.
• The Singapore High Court granted a four-month moratorium to restructure liabilities related to the breach.
• A recent joint statement attributes the hack to the Lazarus Group, which operates from North Korea.

WazirX has frozen $3 million in USDT linked to the $230 million breach from July last year. 45% of the exchange’s reserves were compromised in the security breach. The frozen assets represent a portion of funds linked to the massive breach.

Advertisement

WazirX freezes $3M in USDT from hack

Indian crypto exchange WazirX, which suffered a $235 million hack in July of last year, announced that it has frozen $3 million worth of USDT, which had been stolen by the hackers. According to Decrypt, WazirX said that it has been working to…

— CoinNess Global (@CoinnessGL) January 17, 2025

The attack targeted Ethereum-based ERC-20 tokens stored in the exchange’s hot wallets. WazirX has since been working on recovery efforts. Last November, co-founder Nischal Shetty announced plans to reopen trading by February this year. He also confirmed the exchange’s commitment to recovering stolen funds.

Legal Challenges and Investigations Continue Following the Security Breach

The Singapore High Court granted a four-month moratorium to Zettai Pte Ltd, WazirX’s parent company, in August 2024. This court order provided time to restructure liabilities related to the breach. On the same day, rival exchange CoinSwitch filed a lawsuit over $9.7 million in locked funds. These funds included both ERC-20 tokens and other digital assets.

By September, investigators tracked $50 million of stolen funds flowing through Tornado Cash. The cybercriminals used this privacy mixer to launder the stolen funds. In the most significant transfer, $10 million in ETH was traced in September.

WazirX also revealed plans in October to reveal 240,000 wallet addresses and balances in a court affidavit as part of the restructuring process. A recent statement issued by the U.S., Japan and South Korea points the hack to North Korea’s Lazarus Group. The three countries have called for more sanctions in order to curb crypto hacks from groups linked to North Korea.

🔸 DPRK Hackers Stole $659M in Crypto Last Year

The Democratic People’s Republic of Korea (DPRK)-backed hackers have stolen at least $659 million in 2024 through various crypto heists.

The USA, Japan and South Korea released a joint statement Tuesday, detailing North…

— Cryptonews.com (@cryptonews) January 17, 2025

Users Raise Concerns as Regulatory Oversight Remains Limited

The breach affected millions of users and also raised questions about the overall security of the platform. WazirX had more than 16 million investors when the attack occurred. It also exposed broader risks in the cryptocurrency market. Justice Sachin Datta of the Delhi High Court commented on the platform’s accountability. He stated that WazirX would bear financial responsibility if found at fault.

Delhi High Court Judge to #WazirX on $235 million hack: "YOU CANNOT JUST SAY SORRY"

– The Delhi High Court has sought responses from the government, the Reserve Bank of India (RBI), and other relevant parties

– Justice Sachin Datta, while hearing the case, remarked that #WazirX… pic.twitter.com/yGBRRwFZDO

— Global Rashid (@globalrashid007) January 16, 2025

The Reserve Bank of India notified the court that it does not govern cryptocurrency platforms such as WazirX. Justice Datta also expressed concern over the absence of regulation. He warned of potential risks to the financial system.

The Delhi High Court heard a petition that demanded a special investigation team (SIT) to look into the breach. The plea also urged a review of WazirX’s practices.

Transparency and Recovery Efforts Take Center Stage at WazirX

The Singapore court-approved restructuring efforts being carried out by WazirX. It seeks to recover as much stolen assets as possible. The exchange also introduced a Recovery Token scheme in November to address user claims. Tokens were distributed to affected users based on their platform balances. This step was part of WazirX’s broader efforts to rebuild trust and compensate creditors. The hacking group Lazarus Group remains the primary suspect in the breach. The group is known for its links to North Korea and previous attacks on financial institutions.

Advertisement