Indian Police have arrested SK Masud Alam, a resident of West Bengal, for his alleged role in the WazirX hack. Earlier this year, the hack resulted in over $230 million in cryptocurrency losses, as customers were unable to withdraw their funds.
Alam is accused of creating a fake account under the alias Souvik Mondal, which he allegedly sold via Telegram to the hacker. This account was later used to exploit the crypto exchange.
WazirX Hack Remains One of the Largest Security Incidents in 2024
According to local reports, the police chargesheet points to a lack of cooperation from Liminal Custody, a firm responsible for securing WazirX’s digital wallets. Despite multiple requests, Liminal reportedly did not provide critical information, raising concerns about its security practices.
The hack occurred on July 18 and targeted a multi-signature wallet with six signatories: five from WazirX and one from Liminal. It ultimately led to the loss of nearly 45% of WazirX’s stored assets.
In response, the exchange launched a recovery plan ten days later, aiming to return 55% of affected users’ holdings. The remaining 45% was to be issued in USDT-equivalent tokens, leaving users with locked assets.
WazirX also offered a $23 million bounty to incentivize the recovery of stolen funds and announced a $10,000 reward in USDT for any community member providing actionable intelligence. However, the hacker has yet to make any communications.
Amount of different assets lost in the WazirX hack. Source: Elliptic Research
Customers are Outraged Over Missing Out on the Bull Market
For months, WazirX customers have been frustrated for not being able to use their locked assets. The frustration turned into outrage in recent weeks, as the crypto market is going through one of the biggest bull runs of the year.
Affected users are unable to liquidate their assets as prices keep increasing, potentially loosing out on substantial profits.
“Bull Run is here but WazirX users can only watch. Market up 50%+ since the hack. $BTC hitting 90k ATH but what’s the point when funds are frozen?” Indian crypto researcher Budhil Vyas wrote in an X (formerly Twitter) post.
Most recently, the exchange has launched a ‘rebalencing calculator’ to help affected users understand how they will be credited. However, there have been significant concerns from multiple users about the calculator.
Some users pointed out that WazirX is partially refunding them tokens that were not affected in the hack. Others have pointed out that the exchange’s portfolio has surged significantly in the current bull market, even recovering the entire loss from the hack. Yet, it’s still keeping user funds frozen.
“It seems WazirX created rebalancing calculator, just to confuse people & prove to the court that they are doing something. Wazirx has a habit of complicating simple things,” wrote Aditya Singh, the co-founder of Crypto India.
Overall, it seems that users are seemingly frustrated over the exchange’s fund recovery plans. Crypto hacks have become persistent throughout the year. Just last month, Blockchain lender Radiant Capital suffered a $50 million breach. Hackers have also targeted the US government’s crypto wallets, stealing nearly $20 million in recent months.