B2C Trends: Arrest in WazirX Hack Case from West Bengal

B2C Implications of the WazirX Hack

The Delhi Police has arrested a man from West Bengal for his alleged involvement in the cyberattack on crypto exchange WazirX that led to the loss of over $230 Mn from one of its wallets. As per India Today, the accused, identified as SK Musad Alam, was arrested by Delhi Police’s Special Cell from West Bengal’s Midnapore district for allegedly setting up a fake WazirX account to facilitate the hack.

Details of the Arrest

• The accused allegedly opened a WazirX account under a different name and sold it to another individual on Telegram, who used the fake account to orchestrate the security breach at the crypto exchange.
• According to the chargesheet filed by the Delhi Police, wallet custody provider Liminal, responsible for securing WazirX wallets, has allegedly not cooperated with the investigation.
• Liminal has denied any wrongdoing related to the WazirX $230 Mn cyberattack.

Ongoing Investigations

The arrest comes as part of an ongoing probe launched by Delhi Police’s Intelligence Fusion and Strategic Operations (IFSO) division into the WazirX hack that occurred in July. Multiple government agencies, including the Financial Intelligence Unit, Intelligence Bureau, and Indian Computer Emergency Response Team (CERT-In), have also launched investigations.

Future of WazirX

WazirX recently announced its plans to resume trading on its platform to make users whole after the cyberattack cost the exchange over $230 Mn in assets. Reports indicate that WazirX aims to restart operations by February 2025. Additionally, WazirX is reportedly establishing a committee of creditors to assist in its restructuring plan.

Notably, a court in Singapore has granted WazirX a four-month conditional moratorium to restructure its liabilities.

Controversial Transfers

Recently, Ashish Singhal, cofounder of CoinSwitch, accused WazirX of transferring over $73 Mn in crypto assets to other exchanges following the heist. The ongoing developments in this case highlight the need for greater security measures in the cryptocurrency sector.