Officials from India’s Financial Intelligence Unit and other agencies are probing WazirX over a $235 million crypto hack, as the exchange investigates potential insider involvement.

WazirX Collaborates with Authorities

Indian cryptocurrency exchange WazirX is working closely with government agencies, including the Financial Intelligence Unit, to address the aftermath of a significant cyberattack. In July, the exchange suffered a theft of $235 million from its wallet, leading to intensified scrutiny from regulatory bodies.

Investigation Details

WazirX has provided authorities with comprehensive server logs, transaction trails, and blockchain addresses related to the hack. Although no physical assets have been seized, the exchange remains actively engaged in discussions with regulatory bodies to ensure compliance and transparency.

Broader Industry Implications

The Financial Intelligence Unit has reached out to other stakeholders in the crypto sector to evaluate the broader implications of the hack. This incident has heightened concerns about the unregulated nature of the cryptocurrency industry and its potential impact on retail investors.

Efforts for Transparency and Recovery

WazirX plans to publicly disclose wallet addresses through court affidavits and respond to user queries to uphold its commitment to transparency. The exchange aims to form a 10-member committee of creditors by October 9. This committee will guide restructuring efforts, with the goal of returning 52-55% of the remaining crypto assets to clients within six months.

Engagement with Potential Partners

WazirX’s parent company, Zettai, has reportedly initiated discussions with 11 potential partners. These partners have provided preliminary proposals aimed at enhancing user recoveries through capital injections and profit-sharing strategies. Details of these talks remain under wraps.

Impact and Independent Audit

WazirX incurred a $235 million loss from the July 18 cyber-attack, significantly impacting the exchange. As part of its response, WazirX sought a Scheme of Arrangement in Singapore, a restructuring process under local insolvency laws. An independent audit by Grant Thornton later found no evidence implicating Liminal Custody’s infrastructure—WazirX’s custodian partner at the time—in the multi-million dollar hack.

“This incident has highlighted the critical need for stronger security measures and regulatory oversight in the cryptocurrency industry.”

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