Liminal Custody Cleared in $230 Million WazirX Hack, Audit Confirms

An independent audit by Grant Thornton found no evidence that Liminal Custody’s infrastructure was involved in the $230 million WazirX hack.

Grant Thornton’s audit concluded that Liminal Custody, the Singapore-headquartered crypto custodian, was not the main source of the $230 million hack of WazirX. The breach originated “outside of Liminal’s infrastructure,” the company stated in a blog post on September 9.

The breach, which occurred in July, allowed attackers to siphon off more than $230 million in cryptocurrencies. WazirX, which has moved its assets to new multi-signature wallets, initially pointed to discrepancies between Liminal’s interface and transaction data. However, the audit by Grant Thornton found no evidence of compromise in Liminal’s infrastructure. Liminal Custody has not publicly shared the audit findings.

“Grant Thornton conducted a detailed assessment of Liminal’s infrastructure and informed us that Liminal’s frontend and backend infrastructure is secure, with no evidence of any compromise or vulnerabilities related to the transaction workflow.”

Liminal Custody emphasized that discrepancies between the data payloads generated by its system and those received from the client suggested two possible sources for the breach: vulnerabilities within the client’s infrastructure or the custodian’s frontend systems. The company added that it is still awaiting an “end-to-end review from our auditors.”

The company noted that its multi-signature wallet model ensures that client keys remain with customers, adding that users “can never initiate a transaction and all transactions always originate at our client’s end first.”

Following the exploit, WazirX attempted to institute a “socialized loss strategy,” allowing users to access 55% of their funds, with the remaining 45% held by the exchange in Tether equivalent tokens. However, the proposal was met with widespread disapproval, with users accusing the exchange of trying to avoid taking full responsibility for the losses incurred from the hack. Subsequently, WazirX was forced to backtrack on the plan, asking for more time to work on a resolution.

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