Cryptocurrency exchange WazirX recently suffered a hack in July 2024, resulting in a loss of over $230 million in funds. Initially, WazirX suspected that the breach may have been due to vulnerabilities between Liminal Custody’s interface and transaction data. However, an independent audit conducted by Grant Thornton cleared Liminal Custody of any direct involvement in the exploit, stating that the breach occurred outside of their system.
The audit findings suggest that the hack likely originated from the client’s side, as Liminal Custody’s systems were found to be secure. Liminal Custody’s multi-signature wallet model, which allows clients to maintain control of their keys, played a significant role in ensuring the safety of its systems. Despite this, a complete review from auditors is still needed to fully understand how the breach occurred.
Following the hack, WazirX proposed a “socialized loss strategy” that would allow users to access 55% of their funds, with the remaining 45% held by the exchange in Tether (USDT) tokens. However, users strongly opposed this proposal, accusing WazirX of avoiding full responsibility for the incident. In response to the backlash, WazirX reversed its plan and promised to explore other options for compensating users who lost funds in the breach.
Grant Thornton’s audit has shifted the focus onto vulnerabilities within WazirX or its systems, rather than Liminal Custody’s infrastructure. WazirX has since improved its security by moving its assets to new multi-signature wallets. Additionally, the exchange company Zettai has called for support from “white knights” to rescue WazirX from the aftermath of the hack.
Overall, the audit has cleared Liminal Custody of blame in the $230 million WazirX hack, highlighting the importance of secure infrastructure and client authorization in preventing such breaches. The incident serves as a reminder of the risks associated with cryptocurrency exchanges and the need for robust security measures to protect users’ funds.
