$230 million stolen from India's top exchange WazirX: Binance cut off cooperation due to suspected money laundering, annual trading volume drops by 90%
Written by: Nancy, PANews
Two years ago, WazirXBinanceThe months-long acquisition dispute has attracted market attention.exchange又因高达 2.3 亿美元的被steal资产再度成为公众热议话题，也让印度的加密市场发展备受关注。
Nearly half of the reserve funds were stolen, launching a white hat bounty program
On July 18, WazirX was hit by a multi-signaturewalletAppearSafetyThe vulnerability resulted in the theft of crypto assets worth $230 million, nearly half of which were SHIB. According to the transparency report disclosed by WazirX in June, its asset holdings amounted to $503 million, which also means that theexchangeMore than 45% of the reserve amount was lost.
The next day, WazirX released preliminary findings on the attack, saying that since February 2023, WazirX walletOperates using Liminal's digital asset custody and wallet infrastructure services. The cyberattack stems from the discrepancy between the data displayed on the Liminal interface and the actual content of the transaction. During the cyberattack, the information displayed on the Liminal interface did not match what was actually signed. WazirX thus suspects that the payload was replaced to transfer control of the wallet to the attacker.
Liminal Custody was unwilling to take the blame for WazirX’s “accusations”. Liminal Custody said in a statement that its infrastructure had not been damaged and all wallets (including WazirX’s wallets) wereSafetyUnfortunately, three of the victim machines had malicious code injected into their transactions, indicating that this was a sophisticated and planned attack against a Gnosis smartcontractAttacks on multi-signature wallets.BlockchainAnalysis firm Elliptic said hackers linked to North Korea may be behind the hack.
At present, the WazirX hacker has sold all the stolen assets for ETH. The attacker's ETH holdings have exceeded 59,000, with a value of more than $200 million. In order to track and recover the stolen funds, WazirX has reported to the Financial Intelligence Unit (FIU) and the Indian Computer Emergency Response Team (CERT-India).Xiaobai Navigation）报告此事件，并联系了超过 500 家exchange以封锁已识别的地址。
At the same time, WazirX has also launched the 10% white hat bounty program to recover funds, inviting white hat hackers from all over the world,BlockchainForensic experts and networksSafetyProfessionals have joined the task, and the action plan includes tracing the stolen funds, recovering customer assets, and conducting a deeper analysis of the cyber attack.
In addition, due to cyber attackssteal影响了 WazirX 维持 1:1 资产抵押的能力，因此该交易所已暂时暂停交易，以进行彻底数据检查和Safety审计程序，并努力尽快实现提现。
As India's leading crypto exchange, WazirX's trading volume has also dropped sharply. According to data previously disclosed by WazirX officials, the exchange's trading volume in 2023 has dropped to about $1 billion, down more than 90% from the same period of the previous year, and down 97% from 2022. Of course, this is also closely related to India's increasing regulatory pressure and heavy crypto taxation system.
因所有权与币安「撕破脸」，WazirX 年交易量下滑超 90%
WazirX first became known to the outside world because it was a partner of Binance in entering the Indian market and was once the latter's acquisition target. However, after WazirX was accused of money laundering by Indian regulators, Binance "disturbed" it, which also triggered an ownership dispute. The outcome of this dispute also sowed the seeds for this theft.
In 2022, WazirX claimed that it moved its base from India to Dubai due to India's implementation of a new tax system for crypto transactions. But soon after, WazirX was accused by Indian law enforcement agencies of being investigated for two cases of money laundering and violation of foreign exchange regulations, claiming that the platform was involved in money laundering of 27.9 billion rupees (over 350 million US dollars), and also froze tens of millions of dollars of assets of some executives of the exchange.
Binance announced in 2019 that it had "acquired" the exchange. After WazirX was accused of money laundering by Indian authorities, Binance founder CZ immediately issued a statement saying that the acquisition deal had never been completed. Zanmai Labs is the entity that operates WazirX and was established by the original founder. Binance has never owned any shares in Zanmai Labs, the entity that operates WazirX. Binance only provides wallet services to WazirX as a technical solution, and also uses off-chain transaction integration to save network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user registration, KYC, transactions, and initiating withdrawals.
CZ's clarification was immediately refuted by WazirX CEO Nischal Shetty, who said that WazirX was acquired by Binance and Zanmai Labs is an Indian entity owned by Nischal Shetty and his co-founders. Zanmai Labs has obtained Binance's permission to operate Indian rupees andcryptocurrencyBinance operatescryptocurrencyTrading pairs, processing cryptocurrency withdrawals. Users can verify this fact by visiting WazirX’s TOS (Terms of Service). Also, Binance owns the WazirX domain name, root access to AWS servers, all cryptocurrency assets, all cryptocurrency profits, do not confuse Zanmai with WazirX.
Subsequently, the two sides engaged in a months-long war of words, each holding their own opinions. Binance believed that WazirX shirked responsibility for its misconduct. CZ advocated that users should transfer their funds on WazirX to Binance, and stated that Binance requested the transfer of WazirX system source code, deployment, and operation in February 2022, but was rejected by WazirX, and Binance could not control their system. Binance also stopped supporting the off-chain transfer function between WazirX and Binance shortly afterwards. On the other hand, Zanmai Labs was exposed to seek legal means to resolve the ownership dispute with Binance.
And this ownership dispute escalated further in 2023. In January 2023, Binance issued an "ultimatum", requiring WazirX to issue a clarification statement on the misleading relationship between the two parties, retract Nischal Shetty's previous statement that Binance owns WazirX and delete all Binance-related content in the terms of service, otherwise Binance may terminate WazirX's service agreement before February 3. However, this request was rejected by WazirX, which stated that the so-called "clarification statement" was "unethical" and that Binance tried to use media pressure and threats to force Zanmai to issue false and misleading statements as "clarifications." Not only that, WazirX also stated that Binance's accusations were false and unverified, and that it had made huge profits from its control of the exchange, which was also emphasized in a tweet by WazirX in May 2023 that Binance controls WRX. Token(Binance Launchpad Project) and holds all IE0 proceeds, with no quarterly destruction in the past 5 quarters (i.e. since January 2022).
In the end, Binance announced that it would stop providing wallets and related technical services to WazirX in response, and the latter's users could no longer use Binance wallet services. Since then, the two partners have completely parted ways.
India's high adoption rate attracts crypto companies to invest, and the regulatory environment is changing
However, after ending cooperation with WazirX, Binance did not slow down its pace of layout in the Indian market. It now accounts for nearly 90% of the country's $4 billion in crypto holdings. The lucrative Indian market is an important reason for the layout of crypto companies such as Binance.
according toBlockchainThe "2023 Global Cryptocurrency Adoption Index" released by the analysis platform Chainalysis shows that India ranks first in cryptocurrency adoption, which is enough to show that India still occupies an important share in the crypto market. In order to attract investors, the Securities and Exchange Board of India even announced this year that it plans to officially introduce T+0 in 2025 to compete with cryptocurrencies.
Not only that, India's unfriendly regulatory policies towards the crypto market are also loosening up. In January this year, Binance, Kraken and other exchange apps were blocked by the Indian Financial Intelligence Agency for not complying with India's anti-money laundering rules and were removed from the Indian Apple App Store. But in May this year, Binance and KuCoin became the first offshore crypto-related entities approved by the Indian Financial Intelligence Unit (FIU) on the condition that they paid a fine after a hearing with the FIU.
In addition, India's onerous crypto tax system is also likely to be adjusted. As we all know, the huge income tax of 30% has hit the development of crypto transactions in the country. For example, since Indonesia introduced a partial collection period for the cryptocurrency tax system, its cryptocurrency tax revenue in 2023 has dropped by 63% to 31.7 million US dollars. However, Indonesia also plans to reassess the income tax and value-added tax levied on crypto transactions this year. The reason behind this is that cryptocurrencies are expected to become an integral part of Indonesia's overall economy in the near future.
However, it should be noted that the Indian market still faces regulatory uncertainty. India’s finance minister recently said that cryptocurrency regulation requires global consensus, and the Reserve Bank of India has also submitted its views on cryptocurrencies, emphasizing the macroeconomic risks associated with cryptocurrencies, as well as issues related to tax evasion and fiscal stability.
In general, the high adoption rate and the relaxation of strict regulatory attitudes may drive the further development of the Indian market, and the theft of WazirX may also provide more market space for other crypto exchanges.
The article comes from the Internet:$230 million stolen from India's top exchange WazirX: Binance cut off cooperation due to suspected money laundering, annual trading volume drops by 90%
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