Indian crypto exchange wazirX was hacked on 18th July and its been almost 1.5 months. In this hack, crypto worth $230 million was stolen from their ERC 20 wallet. They had all their ERC 20 tokens in one multi-sig wallet. Exchange has confirmed that they have lost 45% of their crypto holding but they have also been playing the blame game instead of taking responsibility. This is the first time any Indian Crypto exchange has been hacked and for the first time, I have seen how an exchange can play a dirty game with the users to keep themselves safe and put the blame on customers and also to charge them for all the expenses. Yes, you read it right because now they have come up with a plan which is called the Singapore arrangement scheme and with this plan, they are asking the Singapore government to allow them six months so that they can try on the fund recovery. Nothing is guaranteed and one of the surprising points to notice is that they are withdrawing 100 Crore INR from users' funds for legal expenses.
It's like they are taking legal action on the expenses of users but the exchange is not contributing any money from their pocket which is not just surprising but also I believe it's a very bad practice. When they are questioned why they kept all their funds in a single wallet then they have no answer instead they start blaming their service provider for the holding. I mean it is hard to understand that you just trusted an exchange and they don't know who their service provider is for the crypto holding but the exchange is trying to play dirty and they keep on blaming the users as well as the service provider who is providing the custody services to them.
Now today there is another sad news the hackers have started moving funds through the tornado cash. For those who don't know what tornado cash is then I'd like to mention here that this is a way through which anyone can transfer the funds without revealing any identity this way tracking will not be possible and it is like the funds are gone. So far hackers have transferred 2600 ETH ($6.5 Million) and since they have started the fund's movement they will continue to do it maybe in one go or maybe in parts that we can't say but ultimately now after 1.5 months the money is going outside and exchange is not able to do anything. You can check the below snapshot for the transaction history-
Exchange has confirmed in the past that they have got more than 300 entries for the first fund's recovery but they have not confirmed that any amount has been recovered so far. Users are struggling to get their crypto back and even after a lot of discussions they finally enabled the INR withdrawal but that is also not started properly. I mean to say they have their 34% funds frozen by the government authorities and they did not even bother to inform the community about it. You just are not aware of it but their funds are on hold the exchange has confirmed when they started the INR withdrawal. This way the users are left with 66% of INR funds and those two can be withdrawn in 2 parts so for that phase one is already live.
Probably they are going to start phase two shortly in which they will allow another 33% of withdrawal but there is no update on the remaining funds which is going to be 34% and this is another transparency issue with this exchange. Overall they are having a lot of issues with the communication and sharing transparency report and also they are not answering all the questions as they do the cherry picking of questions and answer the easy ones but ignore the questions that might be difficult for them to answer. They have not provided any transparency report and a fair update on the INR holding till now but they are expecting community support despite taking a need from their side which is unfortunate. I do not know how things are going to move in future and to be honest, I have the least expectation of funds recovery in this scenario.
I have been using this exchange since the beginning of its launch and there was a time when I had quite a good amount of funds in the exchange but it's good that I moved most of the tokens when there was an issue with the Wazirx and Binance acquisition. I also had some funds in my wallet because they did not allow the withdrawal but it was not so big hence I'm not much bothered about it but I keep on questioning them and participating in all the initiatives that the community has taken because it does not matter whether the funds are big or small but we must question the exchange. Let's see how things move further and I will continue to share updates about it. If you are from India then you must pay attention to this if in case you have used exchange in the past and have funds there.
Thank you