On July 18, WazirX experienced a significant security breach, leading to the loss of $235 million in user funds. The hack specifically targeted a multi-signature wallet managed jointly by WazirX and its custodian, Liminal. Despite the ongoing controversy, Binance has distanced itself from the incident, emphasizing that it neither owned WazirX during the hack nor has any responsibility for the lost assets.
WazirX Co-founder Suggests Binance Involvement
In an affidavit, WazirX co-founder Nischal Shetty hinted at a possible link between Binance and the financial losses. However, Binance has firmly denied these allegations, stating that it has never owned or controlled WazirX. The exchange underscored that it had no involvement in WazirX’s operations at the time of the hack.
Binance further clarified that its relationship with WazirX ended following previous disputes. Contrary to circulating rumors, WazirX is owned by an Indian company named Zanmai InfoTech. Before their separation, Binance provided wallet services to WazirX, but this partnership ended in January 2023. Subsequently, WazirX selected Liminal as its new custodian for user funds.
Binance Rejects Responsibility
In its blog post, Binance emphasized that it had no influence over WazirX’s decisions, including the choice of Liminal as a custodian. As a result, Binance claims no responsibility for the security breach or the lost funds.
WazirX Faces Financial Trouble After the Hack
The hack has placed WazirX in a precarious financial situation, rendering it unable to fulfill user withdrawal requests. In response, WazirX’s parent company, Zettai Pte Ltd, has filed for a moratorium in the Singapore High Court. This legal maneuver aims to protect its assets—including WazirX user funds—from creditors.
Nischal Shetty disclosed that nearly half of the platform’s cryptocurrency holdings were lost in the attack, leaving WazirX insolvent. The legal conflict between WazirX and Binance continues, with both parties presenting different versions of events. While Binance maintains it had no role in the hack or the subsequent losses, WazirX’s management faces mounting pressure from users and creditors.
What Lies Ahead for WazirX Users?
As the ramifications of the hack unfold, WazirX users find themselves in a vulnerable position. Binance has urged WazirX to take responsibility and compensate the affected users, while also calling for more transparency regarding the hack.
The WazirX hack underscores significant security issues within the platform. As Binance and WazirX continue to blame each other, users and creditors are left waiting for a resolution. Meanwhile, Binance remains steadfast in its claim of non-involvement.
Additional Resources
For a comprehensive overview of recent crypto hacks, including incidents involving Indodax, Caterpillar Coin, and Apple, check out our Crypto Hack Weekly Report.
Community Opinion
Whose side are you on? Do you believe Binance’s claims of non-involvement, or do you think they have something to hide? Share your opinion in the comments below.
