How WazirX is Navigating the Fallout from Liminal's Security Lapse

July 18, 2024, will go down in history as a black day that shook the entire crypto world, especially the Indian crypto community. India's one of the largest and most trusted crypto exchanges, WazirX, became a victim of the biggest crypto hack due to its trusted custody wallet service provider, Liminal, oversight.

The Cyberattack: A Shocking Turn

The attack caught everyone off guard. Hackers exploited a vulnerability in Liminal Custody's security, breaching WazirX's multisig wallet and causing a significant loss of $230 million worth of digital assets.

While WazirX focused on limiting the damage, Liminal Custody, their supposed secure partner, chose to deflect blame rather than take action.

WazirX's Response

WazirX took immediate action. Their top priority was safeguarding remaining assets and assessing the full extent of the attack. They quickly issued a preliminary report and kept users informed with regular updates.

They also launched a bounty program, offering ethical hackers a 10% reward for recovering stolen funds.

Liminal's Great Job

Liminal Custody's response was not just underwhelming but DISAPPOINTING.

Rather than taking proactive steps, they seemed to avoid responsibility. Their vague statements and lack of concrete actions left many questions unanswered.

How can Liminal be so sure about its security without a thorough forensic investigation? Are they covering up a deeper issue?

Community Comes First, But Not For Liminal

The attack rattled the Indian crypto community, and WazirX knew it had to act fast. They organized a YouTube live session to address user concerns and outline their recovery strategy. This session was crucial for calming anxieties and demonstrating WazirX's commitment to transparency.

Liminal Custody, on the other hand, failed to provide clear communication or a solid plan. Their erratic updates and lack of transparency did little to reassure users or address the situation effectively.

The Road to Recovery

WazirX's recovery efforts have been robust.

They reached out to over 500 crypto exchanges to block and recover stolen assets.

Despite facing resistance, they proposed a fair strategy to distribute losses equitably among users.

WazirX also filed an FIR and collaborated with law enforcement agencies to speed up the process.

Partnered with Mandiant Solutions, a top-notch cybersecurity firm, to conduct a forensic analysis. The report confirmed that WazirX's systems were not compromised.

In contrast, Liminal Custody has been less forthcoming. Shockingly, they deleted a blog post about their $50 million insurance policy for its customer's assets, a move that hasn't gone unnoticed on X (formerly Twitter). The community is still waiting for a detailed and transparent response from Liminal.

Moving Forward

WazirX suspended withdrawals and trading immediately after the hack, causing some anxiety among users. However, they are gradually resuming INR withdrawals, providing a glimmer of relief.

As for Liminal Custody, users are still in the dark. Clear communication is overdue; the longer they delay, the more they risk their credibility.

According to the news, reports, and personal findings, Liminal Custody is definitely hiding something. Do they know it might be their fault that users' $230 million is at stake? Why has Liminal not come up with a solid investigation report until now? The questions are never-ending. The community awaits Liminal's response at the earliest. Why are they silent on this matter if they are not at fault?