WazirX begins second phase of fiat withdrawals early, hackers begins moving funds

WazirX has begun the second phase of its fiat currency withdrawal process ahead of schedule on Sept. 3.

The process was originally slated to begin on Sept. 9 and comes as the exchange faces the aftermath of a major security breach that resulted in the theft of over $230 million in user assets.

CEO Nishal Shetty shared the update on social media and said the exchange is continuing to do all it can to restore access to customer funds.

Early withdrawal access

For now, users can withdraw up to 66% of the total INR amount deposited on the exchange, with the remaining amount to be unlocked sometime in the future. The early withdrawal access is a significant step as WazirX undergoes a restructuring process in Singapore.

The exchange has been grappling with the consequences of a security breach in July, where a hacker exploited a vulnerability in one of its multisig wallets, leading to the loss of significant assets, including $100 million in Shiba Inu (SHIB) and $52 million in Ethereum (ETH).

The hack forced the exchange to suspend its operations and pursue restructuring to try and make users whole. However, legal advisers have indicated that customers are unlikely to recover the full amount of their lost funds.

The best-case scenario is projected to be a return of between 55% and 57% of the original assets. The restructuring process aims to address these liabilities, but the road ahead remains uncertain for many affected users.

Hacker moves funds

In a parallel development, the hacker responsible for the breach started moving the stolen Ether through crypto mixer Tornado Cash on Sept. 2, based on Arkham Intelligence data.

The move involved nearly $6.5 million worth of Ether being transferred in 16 transactions on the Ethereum network. The hackers address, which holds over $155 million in various tokens, had not previously moved funds to Tornado Cash, making this a notable development in the ongoing investigation.

The attack on WazirX is believed to be the work of the North Korean hacking group Lazarus, notorious for laundering over $1 billion in stolen funds. The group has been a significant target of international sanctions and is known for its sophisticated cyber operations.