• Delhi Police nab suspect in WazirX hack, aiming to trace funds and secure digital asset exchanges.
  • WazirX hot wallet breach exposes crypto exchange vulnerabilities; investigations focus on accountability.
  • Liminal Custody under investigation for non-cooperation, raising security concerns in WazirX heist case.

Delhi Police have arrested SK Masud Alam from West Bengal for his alleged role in the WazirX cyberattack. Alam is suspected of facilitating the heist which saw the theft of digital assets worth over ₹2,000 crore. This high-profile breach occurred on July 18, 2023.

A suspect in the hack of the #WazirX cryptocurrency exchange, which resulted in the theft of assets worth $235 million, has been arrested in India. Read more: https://t.co/0xfHPbHLN2

— Happy Coin News ☣️ (@happycoinnews) November 14, 2024

How the WazirX Breach Unfolded

According to the Delhi Police investigation , Alam created a fraudulent WazirX account using the name Souvik Mondal. Later, he sold this account to a Telegram user identified as M Hasan. Investigators believe Hasan used this compromised account to initiate the attack. 

The theft targeted WazirX’s hot wallet which is online and more vulnerable to breaches. Fortunately, the cold wallet which is used for offline storage remained secure. The cyberattack led to the loss of nearly 45% of its assets at the time.

Liminal Custody’s Role Under Investigation

An unexpected element in the investigation has been Liminal Custody , the firm responsible for safeguarding WazirX’s wallets. According to police, Liminal Custody did not provide critical information necessary for the investigation, despite several requests. 

This lack of cooperation has raised questions about the company’s security practices. Moreover, Delhi Police indicated that Liminal’s role will be reviewed further, with a supplementary chargesheet to address these concerns.

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Police Seize Critical Data 

Delhi Police seized three laptops from WazirX used by authorized signatories to manage multi-sig wallets, which require multiple approvals for each transaction. This measure adds an additional security layer, and investigators hope that data retrieved from these devices will help track stolen funds.

WazirX has cooperated fully, supplying investigators with transaction logs and KYC details. Despite difficulties posed by the lack of cooperation from Liminal Custody, authorities are committed to identifying all individuals behind this significant crypto heist and restoring confidence in digital asset security.

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