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India’s leading crypto exchange the WazirX Safe Multisig wallet on Ethereum has recently faced a major attack. According to an X post by Web3 security firm Cyvers, approximately $234.9 million worth of funds from the Safe Multisig wallet were transferred to a new address.
Tornado Cash, a decentralized protocol that enables private transactions, funded each transaction. The compromised assets included Tether (USDT), Pepe (PEPE), and Gala (GALA), which have already been swapped into Ether (ETH).
North Korea’s Involvement
Polygon Labs CEO Mudit Gupta commented on the incident. He suggested that the nature of the hack points towards North Korean cybercriminals as the likely culprits.
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The primary attacking wallet still has over $104 million in cryptocurrencies. This includes around $100 million in Shiba Inu (SHIB), $52 million in ETH, and $11 million in Polygon (MATIC).
It also holds $4.7 million in FLOKI, $3.2 million in Fantom (FTM), $2.8 million in Chainlink (LINK), and $2.3 million in Fetch.ai (FET), among others.
How Did it Happen?
Gupta explained the attackers’ approach: they upgraded the Safe Multisig wallet to a malicious version, enabling them to drain its funds. This method allowed them to avoid the need for multiple transactions, which could have exposed their activities sooner.
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The attackers likely compromised two out of four private keys directly, with the remaining keys obtained through a process known as signature phishing. Gupta suggested that a user interface or wallet compromise might have facilitated this.
The hackers tricked two signers into authorizing a seemingly normal USDT transfer, which was actually a malicious transaction designed to upgrade the Safe Multisig wallet.
When the transaction was published on-chain, it failed. But the hackers still got the necessary signatures, which are publicly submitted in transactions. After that, they used the other two compromised private keys to generate extra signatures. This led to the exploit transaction that upgraded the multisig wallet to a malicious contract, ultimately transferring all the funds to attackers.
WazirX Response
WazirX has temporarily suspended withdrawals of both cryptocurrencies and Indian rupees on its platform. The exchange’s official X account posted that the team is “actively investigating the incident” and will provide updates as the situation develops.
This incident has sent shockwaves through the Indian crypto community. Many highlighted the need for strong security measures in protecting digital assets.