As a seasoned crypto investor with over a decade of experience in this volatile market, I’ve learned to navigate the stormy seas of digital currency with caution and a keen eye for detail. The recent WazirX hack controversy has certainly tested my patience and left me questioning the integrity of some players in this industry.
Following a cyber-incident in July 2024, which led to the theft of $235 million from WazirX users’ digital wallets, Binance has refuted claims that they are accountable for this security lapse.
In a formal announcement, they made clear that they do not own or manage the Indian platform, and instead called on the team to assume complete responsibility for the security breach.
WazirX Hack Controversy
As an analyst, I found myself at the heart of a contentious situation when WazirX disclosed a security breach on a multisig wallet they managed, along with Liminal, a third-party custodian. This wallet, which had five members from their team and one signatory from Liminal, was unfortunately compromised, leading to the unfortunate loss of millions of dollars’ worth of user assets.
In simpler terms, Binance made clear that they weren’t responsible for running the hacked digital wallet or ensuring security during the time when the breach occurred.
After the event, WazirX encountered numerous withdrawal demands that it was unable to meet. On August 27, 2024, Zettai Pte Ltd, an entity associated with the exchange, petitioned for a legal freeze in Singapore’s High Court to shield itself from debt collectors.
As a crypto investor, I’ve found myself grappling with the aftermath of a cyber attack that reportedly decimated approximately half of the digital assets on the platform. The founder, Nischal Shetty, hinted at potential shared responsibility in this loss, suggesting that Binance might have played a role in these events.
In simpler terms, the world’s biggest trading platform has rejected these accusations and maintains that they have no role in the theft or missing funds. They are instead pointing fingers at their management for shifting responsibility, as users and investors become more and more upset.
Before January 2023, Binance managed wallet services for WazirX. However, as per WazirX’s request, all funds were transferred out of Binance’s custody starting then. Since that point, both WazirX and Liminal gained complete control over the funds, with no further involvement from Binance, the world’s largest cryptocurrency exchange.
Moreover, it was mentioned that Binance has yet to receive any reports about the hacking incident from WazirX, even though Liminal’s investigation seems to have determined that the breach apparently occurred outside of their system.
Misleading Ownership Claims
As an analyst, I can share that previously, discussions about a possible merger or acquisition involving my company and another firm were considered. However, these negotiations never materialized, implying that the Mumbai-based crypto exchange remains under the control and management of Zanmai, a local entity.
However, it is alleged that Shetty and his colleagues gave customers a false impression, suggesting that Binance had ownership or control over the platform.
A firm located in the Cayman Islands stated that WazirX had made unauthorized and deceptive references to it within user agreements. The company alleged that despite numerous attempts to have these mentions removed, the Indian exchange persisted in using Binance’s name, which gave a false impression of an ongoing operational relationship.
The post concluded by urging the crypto community to stay informed and critically assess the “misleading” statements made by Mr. Shetty. “We trust users to be able to come to their own conclusions in light of these facts,” it read.
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2024-09-17 18:10