WazirX, one of the biggest cryptocurrency exchanges in India, has announced that it is ending its partnership with “Liminal Custody” and moving their funds to new Multisig wallets. Liminal Custody is a digital assets custody platform which was entrusted by the exchange with safeguarding the affected multi-sig wallet. The move came after WazirX suffered a massive hack in July which led to more than 45% of the total customer funds being stolen. Liminal and WazirX kept blaming each other for the hack being successful, which led to the users being in the dark about their funds. WazirX continues to assert that their interface and systems remained secure, stating that the breach during the July 18 cyber-attack occurred on Liminal Custody’s end. However, Liminal maintained that its infrastructure was not compromised. 

“We are in the process of migrating the remaining assets held with Liminal to new multisig wallets,” WazirX said. “This step is essential to ensure maximum security of the assets in light of recent events. While we believe our interface and systems remain uncompromised, the same cannot be said for the custodian’s interface post the July 18th incident, prompting this precaution.” Liminal confirmed that they are cooperating in the process. WazirX emphasized that it is taking extreme caution during the migration process due to its complexity. “Although we can’t provide an exact timeline, rest assured that the safety of crypto assets on our exchange is our top priority,” the exchange added. 

“The client could have removed the funds immediately post the incident,” a Liminal spokesperson said in a WhatsApp message. “They’ve always had the ability to exercise full control of wallets, regardless of Liminal or the Liminal key. We have supported and will continue to support the client in moving their wallets and assets as requested.”  

The exchange has faced severe disapproval from the customers because of WazirX not allowing the customers to withdraw their funds, and for a lack of transparency from the side of the exchange. Nischal Shetty, the co-founder of WazirX, has asked the users to cooperate and for some time so that the issues can be resolved. WazirX intends to increase transparency by publishing the list of all new wallets once the migration is finalized. The exchange also addressed ongoing customer concerns about the stolen assets. 

WazirX recently announced that it is in the process of restoring user balances. The exchange will use transaction records from the time of the hack to identify users eligible for reimbursement. To ensure a secure transfer of assets, WazirX has temporarily suspended trading and withdrawal functions. 

The exchange has reassured users that restoring their balances is a top priority and is implementing additional security measures to prevent future breaches. Going forward, WazirX’s focus on transparency and robust user protection will be essential in rebuilding trust and providing a safer trading environment. 

On July 18, hackers infiltrated WazirX’s multisig wallet, making off with over $230 million in cryptocurrencies, which accounted for 45% of the wallet’s total holdings. The wallet was managed by four key holders: three from WazirX and one from Liminal Custody.