WazirX Cryptocurrency Exchange Halts Trading After $230 Million Security Breach, Launches $23 Million Bounty Program

WazirX Cryptocurrency Exchange Halts Trading After $230 Million Security Breach, Launches $23 Million Bounty Program

WazirX, one of India's largest cryptocurrency exchanges, has temporarily suspended all trading activities following a significant security breach that resulted in the loss of approximately $230 million, nearly half of its reserves.

Earlier this week, the Mumbai-based exchange halted customer withdrawals after an attacker accessed one of its multi-signature wallets, which stored crypto assets worth hundreds of millions of dollars. This compromised wallet was protected by six signatories, five of whom were WazirX team members. The breach has substantially impaired WazirX’s ability to maintain the critical 1:1 collateral ratio with assets, raising concerns about the adequacy of its reserves and its ability to reimburse customers fully.

In a tweet on Sunday evening, WazirX explained that the cyber attack originated from a discrepancy between the data displayed on Liminal’s interface and the actual transaction contents. Earlier that day, the exchange announced a bounty program of up to $23 million to incentivize anyone who could help recover the stolen assets.

Risk-management platform Elliptic indicated that its analysis found links between the attacker and North Korea. The loss of $230 million is significant for WazirX, which had reported holdings of about $500 million in its June proof-of-reserves disclosure. The exchange described the security breach as a "force majeure event."

Indian exchanges CoinSwitch and CoinDCX, which collaborate with WazirX for certain services, stated that their customers were not impacted by the WazirX attack.