WazirX heist breakthrough: Police arrests accused, key details revealed

The Indian authority made a huge breakthrough in what can be said the “biggest crypto heist in the country.” Delhi Police arrested an individual named “SK Masud” in connection with the cyberattack on WazirX. The hack resulted in a Rs 2,000 crore (approx. $235 million) loss in digital assets.

This comes in when the founder of WazirX, Nischal Shetty, announced plans to launch a separate decentralized exchange (DEX). He suggested that DEX linked decision is sort of a reply to a major hack. The about to be launched product will operate next to the company’s current centralized service.

WazirX hack investigation deepens

According to reports, SK Masud Alam, a resident of West Bengal, opened a fake WazirX account under the name “Souvik Mondal” and sold it via Telegram. The account was then used to breach the crypto exchange. The attack drained the exchange’s hot wallet and even targeted the cold wallet.

The chargesheet has cited that allegedly there has been a lack of cooperation from Liminal Custody, the firm securing WazirX’s wallets. However, Alam’s arrest is seen as a massive development in the fresh case as the victims demand justice and refund.

The crucial investigation done by Delhi Police’s Intelligence Fusion and Strategic Operations (IFSO) division put a spotlight on several important aspects of the hack related incidents. It highlighted that despite multiple notices, Liminal failed to provide the requested details which raises questions regarding its security protocols and accountability. 

It added that Liminal’s lack of cooperation had made it more difficult to trace back the full chain of events. It hinted that the role of the firm responsible for securing WazirX’s wallets will be further noted in a supplementary chargesheet ahead.

As part of the probe, Delhi Police seized three laptops from WazirX’s authorized signatories to investigate the misuse of multi-sig wallets. These wallets require multiple approvals for transactions. No evidence of unauthorized system access was found, but the investigation is ongoing. It added that the Indian Cyber Crime Coordination Centre (IFSO) also supported the probe.

$230 million nearly laundered through Tornado Cash

WazirX lost over $100 million in Shiba Inu (SHIB) and $52 million in Ether. The stolen funds accounted for over 45% of its total reserves. The mystery behind India’s biggest crypto hack took a twist when over $230 million in stolen funds from WazirX were nearly laundered clean. On-chain data revealed that the stolen funds were being moved through new wallets before being routed through Tornado Cash.

Tornado Cash is frequently used by criminals to hide stolen funds. The developer was sentenced to 64 months in prison earlier this year for money laundering.