Recently, WazirX conducted a preliminary investigation into a sophisticated cyber attack on its multi-signature Ethereum wallet and found no evidence indicating the compromise of WazirX signers’ machines. The attack, which took place earlier this month, has raised significant concerns within the crypto community.
Initially, the exchange attributed the hack to an issue with its custody service provider, Liminal’s user interface. However, Liminal denied any responsibility for the incident in its investigation report, stating that compromised hardware wallets were the likely cause. Despite ongoing forensic analysis, WazirX has not found any signs of malware or tampering on their signers’ devices.
WazirX outlined two potential scenarios to explain the breach. The first scenario involves a breach within Liminal’s infrastructure, where malicious transactions were received directly from Liminal due to a compromise of their system. The second scenario suggests a compromise of WazirX signers’ devices, although no evidence has been found to support this theory.
Despite having rigorous security measures in place, the attack involved legitimate signatures, pointing to a potential breach within Liminal’s system. The exchange emphasized that the malicious transactions did not originate from WazirX servers, indicating a potential breach of Liminal’s security.
The catastrophic hack on July 18 resulted in the theft of approximately 45% of the crypto held by WazirX, leading to a temporary halt in operations. However, the exchange assured users that their fiat currency deposits remained secure. WazirX is currently collaborating with authorities to find a viable solution and plans to resume services soon.
WazirX stated that it had implemented industry-standard best practices, such as verifying website URLs, using reputable platforms, and employing multi-factor authentication. The incident underscores the evolving challenges of securing multi-signature wallets and the risks associated with blind signing.
Cybersecurity experts have suggested the possible involvement of the North Korean Lazarus Group, known for its sophisticated cyber attacks on financial institutions and crypto exchanges. This highlights the need for heightened security measures and vigilance within the crypto community.
Overall, the WazirX cyber attack incident serves as a stark reminder of the constant threats posed by cybercriminals and the importance of robust security protocols in safeguarding digital assets. It underscores the need for continuous monitoring, thorough investigations, and collaboration with cybersecurity experts to mitigate risks and enhance overall security measures in the ever-evolving landscape of cryptocurrency exchanges.
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