India’s officials probe crypto exchange WazirX over $235m hack: report

Officials from India’s Financial Intelligence Unit and other agencies are investigating a $235 million crypto hack at WazirX, while the exchange is investigating possible insider interference.

Indian cryptocurrency exchange WazirX is cooperating with government agencies, including the Financial Intelligence Unit, following a cyber attack that resulted in the theft of $235 million from its wallet in July, Moneycontrol reported, citing sources familiar with the matter.

The exchange reportedly provided authorities with detailed server logs, transaction traces and blockchain addresses related to the hack. Although no physical assets were seized, WazirX continued to hold numerous meetings with regulators, the report states.

The Financial Intelligence Unit has also reached out to other stakeholders in the crypto sector to assess the broader implications of the hack, which has raised concerns about the unregulated nature of the sector and its impact on retail investors.

As part of its commitment to transparency, WazirX plans to publicly disclose wallet addresses through court filings and respond to user inquiries. The exchange aims to form a 10-member creditors committee by Oct. 9 to guide restructuring efforts, with hopes of returning 52-55% of remaining crypto assets to customers within six months.

WazirX’s parent company, Zettai, has also reportedly initiated talks with 11 potential partners, receiving preliminary offers aimed at increasing user recoveries through capital injections and profit-sharing strategies, but the details of these talks remain unclear.

WazirX suffered a loss of $235 million due to the cyber attack on July 18, which severely affected the exchange and led it to seek a Plan of Arrangement in Singapore, a restructuring process under local bankruptcy laws. An independent audit by Grant Thornton later found no evidence that the infrastructure of Liminal Custody, then WazirX’s custody partner, played a role in the multi-million dollar attack.