Indian authorities have made a major breakthrough in the investigation of the July cyberattack on cryptocurrency exchange WazirX, which resulted in the theft of over $234 million in digital assets.
The Delhi Police’s Special Cell arrested SK Masud Alam, a resident of West Bengal, for allegedly facilitating the attack by creating a fake account.
Alam was apprehended in East Midnapore, West Bengal, and is accused of using the alias Souvik Mondal to open a WazirX account, which was later sold via Telegram to another individual, M Hasan, local outlet India Today reported Thursday.
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Hacker Drains WazirX’s Hot Wallet
The hacking operation reportedly drained WazirX’s hot wallet and attempted to access its cold wallet, which holds funds offline for added security.
As part of the investigation, the police seized three laptops used by authorized signatories of the platform’s multi-signature wallet system.
A chargesheet filed by the Delhi Police revealed complications in the investigation, citing the alleged non-cooperation of Liminal Custody, a firm responsible for securing WazirX’s wallets.
According to the charge sheet, Liminal failed to respond to multiple notices requesting critical data, raising questions about its security measures. Authorities indicated that a supplementary chargesheet would further examine Liminal’s role.
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Meanwhile, WazirX has reportedly cooperated fully with investigators, providing key information such as transaction logs and KYC (Know Your Customer) data.
According to the police, no evidence suggests unauthorized local or remote access to the platform’s systems.
The July 18 cyberattack resulted in the theft of approximately 45% of WazirX’s assets, equivalent to Rs 2,000 crore. The breach exploited vulnerabilities in a multi-signature wallet setup involving six signatories—five from WazirX and one from Liminal Custody.
Launched in 2018, WazirX is a leading cryptocurrency exchange in India. It enables users to trade digital currencies such as Bitcoin and Ethereum.
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RBI Governor Reaffirms Support For CBDC
Last month, the Reserve Bank of India (RBI) Governor emphasized the need to reduce the time and cost associated with overseas remittances while expanding the Real-Time Gross Settlement (RTGS) system to handle transactions in major currencies.
At the Central Banking at Crossroads conference, Governor Shaktikanta Das highlighted the role Central Bank Digital Currencies (CBDCs) could play in enhancing cross-border payments.
The RBI Governor also underscored CBDCs’ potential to facilitate efficient cross-border payments. India is among the few countries that have launched wholesale and retail versions of CBDCs.
As reported, Finance Minister Nirmala Sitharaman has upheld the controversial crypto tax regulations during the fiscal year 2024-2025 budget announcement.
Despite extensive lobbying from the cryptocurrency industry, which presented substantial evidence to advocate for reducing the tax-deducted-at-source (TDS) policy from 1% to 0.01%, the existing rules remain unchanged.
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