WazirX, one of the largest cryptocurrency exchanges in India, is under investigation by various government agencies following a significant cyber hack that occurred in July. This breach led to a loss estimated at Rs. 2,000 crore (approximately $234 million), leaving millions of users concerned about their investments. Authorities are now looking into the implications of this incident on WazirX's customer base.

What agencies are involved in the investigation?

Authorities from the Financial Intelligence Unit (FIU), Intelligence Bureau (IB), and the Indian Computer Emergency Response Team (CERT-In) have initiated inquiries into the hacking incident. Reports indicate that officials have met with WazirX executives to gather information regarding the attack on the platform.

What are the roles of CERT-In, IB, and FIU?

CERT-In, operating under the Ministry of Electronics and Information Technology, will handle the technical aspects of the investigation. The IB, which reports to the home ministry, will focus on security and counterintelligence issues. The FIU, under the finance ministry, will oversee financial transactions related to the hack.

WazirX has complied with requests from these agencies, providing data that includes server logs, transaction trails, and blockchain addresses associated with the theft. The exchange has acknowledged that approximately 43 percent of its users may have lost funds due to the hack, with a significant impact on users in India.

How are hackers exploiting the stolen assets?

Following the incident, hackers have begun to withdraw the stolen digital assets through the Tornado Cash platform, a decentralised cryptocurrency mixer that operates on Ethereum-compatible networks according to a report by the news agency IANS. Additionally, recent reports have emerged indicating that WazirX removed a video from its YouTube channel. This video featured a live town hall session that claimed to guarantee ?100 percent profits from any crypto price appreciation in future with users.? 

The ongoing investigation highlights the increasing scrutiny of cryptocurrency platforms and the need for stronger security measures in the digital asset sector.

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