Crypto Controversy: WazirX’s Security Measures Under Fire for Massive $230M Loss

In recent weeks, a significant controversy has erupted involving WazirX, a prominent cryptocurrency exchange in India. Crypto sleuth TruthLabs accused the company of negligence, which allegedly resulted in a massive loss of over $230 million in users’ funds.

The backlash against WazirX has been fueled by the exchange’s perceived failure to adequately address these concerns. This situation highlights a troubling pattern in the cryptocurrency industry, where transparency and accountability are often overshadowed by defensive rhetoric and evasive actions.

The intriguing saga could be traced back to a breach that took place on July 18, where suspicious transactions reached Safe Multisig on Ethereum’s network. Liminal, the crypto custody firm in charge, saw significant asset losses and the hack resulted in a total loss of nearly $235 million lost.

While criticizing WazirX’s lack of responsibility, TruthLabs compared the exchange’s leadership to Sam Bankman-Fried, the controversial founder of FTX. The sleuth shed light on a similar response in both cases; perceived arrogance and failure to provide substantial proof to back their claims. In response to these criticisms, WazirX has attempted to clarify its position. 

They have pointed out that their security system involves multiple key holders rather than a single point of failure. According to WazirX, the transactions in question required signatures from three WazirX key holders and one Liminal signer. This multi-signature process was in place to safeguard against unauthorized transactions. 

The company has emphasized that on-chain data can verify these claims, arguing that their system was not at fault. However, the company’s lack of transparency and defensive stance have done little to alleviate the concerns of affected users. The ongoing scrutiny has been compounded by criticism from industry rivals. 

As earlier reported by Cryptotale Sumit Gupta of CoinDCX also spoke out,Criticizing WazirX’s strategy with a shout. He called it a “socialized loss” that shifts the strain, unfairly placing users in financial pain.This tension grows within the crypto sphere, as exchanges manage crises, stoking fear.