WazirX halts trading after $230 million 'force majeure' loss

WazirX, one of India’s largest cryptocurrency exchanges, has “temporarily” suspended all trading activities on its platform days after losing about $230 million, nearly half of its reserves, in a security breach.

The Mumbai-based exchange said in a tweet Sunday evening that the cyberattack had substantially impaired its ability to maintain the critical 1:1 collateral ratio with assets, a move that raises more concerns about the adequacy of WazirX’s reserves and its ability to fully reimburse its customers.

WazirX suspended customer withdrawals earlier this week, after an attacker gained access to one of the exchange’s multi-signature wallets, where it stored crypto assets worth hundreds of millions of dollars. WazirX’s impacted wallet was protected by six signatories, five of whom were with the WazirX team.

“The cyberattack stemmed from a discrepancy between the data displayed on Liminal’s interface and the transaction’s actual contents,” the firm said earlier this week.

Earlier on Sunday, WazirX announced a bounty program of up to $23 million to reward anyone who could help the firm recover the stolen assets.

Risk-management platform Elliptic said earlier this week that its analysis had found that the attacker had links to North Korea.

About $230 million in missing assets is significant for WazirX, which reported holdings of about $500 million in its June proof-of-reserves disclosure. The exchange called the security breach “a force majeure event.”

Indian exchanges CoinSwitch and CoinDCX, both of which work with WazirX for some of their services, said earlier this week that their customers hadn’t been impacted by the attack on WazirX.