Indian authorities have arrested SK Masud Alam, a resident of West Bengal, in connection with the WazirX hack. This hack, which occurred earlier this year, resulted in losses exceeding $230 million in cryptocurrency. Customers have struggled to access their funds since the incident.
Alam allegedly created a fake account under the name Souvik Mondal. He reportedly sold this account through Telegram to the hacker, who then used it to exploit the exchange.
The WazirX hack is one of the largest security breaches of 2024. Local reports indicate that the police chargesheet highlights a lack of cooperation from Liminal Custody, the firm responsible for securing WazirX’s digital wallets. Despite multiple requests, Liminal did not provide critical information, raising serious concerns about its security practices.
The hack took place on July 18 and targeted a multi-signature wallet with six signatories: five from WazirX and one from Liminal. This breach led to the loss of nearly 45% of WazirX’s stored assets.
In response, WazirX launched a recovery plan ten days later. They aimed to return 55% of the affected users’ holdings. The remaining 45% would be compensated with USDT-equivalent tokens, leaving users with locked assets.
WazirX also announced a $23 million bounty to encourage the recovery of stolen funds. They offered a $10,000 reward in USDT for any community member who provides actionable intelligence. Unfortunately, the hacker has yet to make any communication.
Customers are understandably frustrated. Many feel helpless as they cannot access their locked assets. This frustration has grown recently, especially as the crypto market experiences one of its biggest bull runs of the year. Affected users are missing out on potential profits as prices continue to rise.
“The bull run is here, but WazirX users can only watch. The market is up over 50% since the hack. Bitcoin hit a new all-time high of $90,000, but what’s the point when funds are frozen?” wrote Indian crypto researcher Budhil Vyas on X (formerly Twitter).
Recently, WazirX introduced a ‘rebalancing calculator’ to help affected users understand how they will be credited. However, many users have raised concerns about its accuracy.
Some users pointed out that WazirX is partially refunding them tokens that were not affected by the hack. Others highlighted that the exchange’s portfolio has surged significantly during the current bull market, even recovering the total loss from the hack, yet user funds remain frozen.
“It seems WazirX created a rebalancing calculator just to confuse people and prove to the court that they are doing something. WazirX has a habit of complicating simple things,” said Aditya Singh, co-founder of Crypto India.
Overall, user dissatisfaction with the exchange’s fund recovery plans is evident. Crypto hacks have become frequent this year. Last month, for example, Blockchain lender Radiant Capital suffered a $50 million breach. Hackers have also targeted US government crypto wallets, stealing nearly $20 million in recent months.