WazirX freezes $3M in USDT amid recovery efforts from $230M security breach

Crypto exchange WazirX, the largest crypto exchange in India, has frozen $3 million in USDT from last year’s catastrophic security breach.

The crypto exchange’s update follows a joint statement from the U.S., Japan, and South Korea that was published this week. The statement attributed the attacks to the Democratic People’s Republic of Korea (DPRK, or North Korea), including the infamous Lazarus Group.

According to the firm, the freezing was the first significant step in a long and intricate recovery procedure that involved numerous jurisdictions and court cases.

WazirX initiates recovery efforts after losing $230 million

WazirX’s July 2024 resulted in the loss of nearly 45% of the platform’s total cryptocurrency assets, or more than $230 million. The firm’s hack ranks third among the largest crypto hacks and exploits recorded in 2024, following PlayDapp’s $290 million and DMM Bitcoin’s $308 million in losses.

The attack that wiped out most of the platform’s assets left WazirX with more than $546.5 million in liabilities. 

Multiple layers of security, including six signatories and whitelisted destination addresses, protected the compromised wallet, which relied on Liminal’s digital asset custody infrastructure.

However, the hackers took advantage of a significant flaw, a difference between the data shown on Liminal’s interface and the real transaction details. 

The scammers could reverse-engineer the system and take control of the wallet. After the incident, WazirX parted ways with Liminal Custody.

In August 2024, the company has since followed up with a restructuring filing with a Singapore court.

WazirX, an exchange founded and currently owned by Zettai in Singapore, has been working with lawyers, forensic experts, and the police to try to recover the stolen funds.

WazirX vows to resume trading by February 2025

In November 2024, cofounder Nischal Shetty assured users at a town hall meeting that recovery was underway and said trading could reopen in February 2025. Freezing some of the swiped stablecoins presents a breakthrough event to regain confidence and pay off affected users.

Earlier U.N. reports estimated that North Korea stole $3 billion in crypto between 2017 and 2023 to fund its sanctioned nuclear weapons programs. Recent data from Chainalysis showed North Korean hackers were responsible for 61% of all cryptocurrency stolen in 2024, totaling $1.34 billion.

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