Major Hack on WazirX: $150 Million in Stolen Funds Converted to Ethereum (ETH)

• The recent cyberattack on WazirX, a prominent cryptocurrency exchange, has captured widespread attention due to its scale and the hacker’s subsequent maneuvers.
• The attacker successfully stole $235 million from WazirX and has strategically converted approximately $150 million of this into Ethereum (ETH).
• According to experts, the hacker’s conversion to ETH may be a tactic to prevent the stolen funds from being frozen or blacklisted by regulatory authorities.

A notable cyberattack on WazirX has resulted in the theft of $235 million, with the hacker converting a significant portion into Ethereum to evade blacklisting measures.

Altcoins Shifted to Ethereum

Blockchain analysis firm, Spot On Chain, has revealed that the hacker converted considerable amounts of stolen altcoins into Ethereum. Specifically, $90.2 million worth of Shiba Inu (SHIB), $10.2 million in Polygon (MATIC), and $7.5 million in Pepe (PEPE) were shifted to Ethereum between July 18-19. This conversion elevated the total value of stolen funds held in ETH from $52 million to $201 million. Blockchain security experts indicate that this move is aimed at avoiding blacklisting, leveraging Ethereum’s contract limitations that prevent the freezing of specific addresses.

Market Repercussions

The ramifications of the attack were quickly felt across the crypto market. For instance, the price of Shiba Inu (SHIB) plummeted by approximately 7% following the breach. Conversely, Ethereum’s price remained relatively stable, dipping only by 0.1%. Despite a substantial portion being converted to ETH, Spot On Chain reported that the hacker still holds around $12 million in other tokens such as Chromia (CHR), Celer Network (CELR), Frontier (FRONT), and Ooki (OOKI).

Implications and Future Outlook

The shift of altcoins to Ethereum underlines a strategy commonly used by cybercriminals to secure their ill-gotten gains. Ethereum’s robust liquidity and stability make it a prime target for swiftly converting and laundering stolen assets through various exchanges and mixing protocols. Security firm PeckShield highlights that these characteristics make Ethereum highly attractive for such nefarious activities, complicating regulatory and legal interdictions.

Exchange Response and Security Measures

In response to the breach, WazirX has implemented stringent countermeasures. As of July 18, the exchange suspended all withdrawals, citing a force majeure event that compromised nearly half of its reserves. WazirX is actively working to reclaim the stolen assets, which includes blocking deposits and tracing the involved wallets. This incident accentuates the critical need for enhanced security protocols within cryptocurrency exchanges to safeguard against such vulnerabilities.

Conclusion

The extensive cyberattack on WazirX and the subsequent conversion of altcoins to Ethereum offer significant insights into the tactics employed by hackers to evade detection and secure their stolen assets. The market repercussions and preventive measures adopted by WazirX highlight the ongoing challenges faced by the cryptocurrency industry. Strengthened security frameworks and vigilant monitoring are essential to protect exchanges and their users from future threats.