The recent hack of the India-based cryptocurrency exchange WazirX has raised concerns and questions about the security of digital assets stored on such platforms. While multiparty computation (MPC) wallet provider Liminal has stated that its infrastructure remains safe and was not compromised in the breach, there are still critical issues that need to be addressed.
According to Liminal’s post-mortem report, the breach at WazirX was attributed to compromised devices within the exchange’s network. Liminal clarified that its user interface (UI) was not responsible for the attack, contrary to WazirX’s earlier claim of a discrepancy in data displayed on Liminal’s interface. The breach, which resulted in an estimated loss of $235 million, occurred because three of WazirX’s devices were compromised, allowing the attacker to exploit the compromised devices.
The attack began when one of WazirX’s compromised devices initiated a legitimate transaction involving Gala Games tokens (GALA). The attacker then manipulated the transaction details provided by the compromised devices, leading to signature mismatches and transaction failures. Subsequently, the attacker extracted signatures from these failed transactions to initiate a new, fourth transaction that appeared legitimate to Liminal’s system. This allowed the transfer of funds from the multisig wallet to the attacker’s Ethereum account.
While Liminal’s report sheds light on the sequence of events during the breach, critical questions remain unanswered. It is unclear how the attacker initially gained access to the three compromised devices at WazirX. Liminal suggests that a sophisticated man-in-the-middle (MIM) attack or a similar client-side compromise may have been responsible for the breach.
In response to the hack, WazirX has engaged law enforcement and is pursuing additional legal actions. The exchange’s immediate plan of action includes tracing the stolen funds and conducting a deeper analysis of the breach with forensic experts to recover customer funds.
The recent hack on WazirX serves as a stark reminder of the vulnerabilities present in cryptocurrency exchanges and the importance of robust security measures. While Liminal’s infrastructure remained secure during the breach, there is a pressing need for greater transparency and accountability in the digital asset ecosystem to prevent such incidents in the future. As the industry continues to evolve, addressing security concerns and learning from past breaches will be crucial in fostering trust and confidence among users.
Leave a Reply