Government officials reportedly questioned the founders of the troubled Indian crypto exchange WazirX on July 18 to learn more about the unauthorized transfer of cryptocurrency from its wallets.
A local Indian news outlet, Moneycontrol, revealed the investigation earlier today. In the Mumbai office of the exchange, WazirX founders have engaged in discussions with a team of officials from the Financial Intelligence Unit (FIU), Intelligence Bureau (IB), and the Indian Computer Emergency Response Team (CERT-In) in the past few weeks.
Sources informed the publication that a team of eight to ten agency officials interacted with the WazirX executives. According to reports, they deliberated on methods to determine how tokens valued at $235 million were transferred to the hackers.
WazirX also investigated the potential for an inside job; however, “no foul play has been detected as of now.”
The laptop records contained transaction details, blockchain addresses linked to hackers, and servers shared by the exchange. The report stated that no personal assets, such as laptops, were confiscated.
Another source stated that the government is concerned about the magnitude of the illegal transfer in WazirX, as it impacts retail investors.
“The government agencies have requested certain data to gain insight into the structure, the process of transfers, and liquidity.” The breach occurred due to the unregulated nature of the sector, which creates grey areas.
FIU Contacts Crypto Stakeholders Following the WazirX Hack
The FIU, the national agency responsible for gathering information regarding suspected financial transactions, has reached out to specific stakeholders in the crypto industry in the wake of the breach. The Ministry of Finance houses the Financial Intelligence Unit (FIU).
The Home Ministry’s Intelligence Bureau (IB) is currently reviewing the security and counterintelligence aspects of the significant breach. Furthermore, CERT-In, a nodal agency that addresses cybersecurity threats, is investigating the technical aspects of the WazirX breach.
On July 18, WazirX, a prominent Indian cryptocurrency exchange, experienced a significant security compromise that resulted in the loss of $234 million. The exchange experienced a nearly 45% loss in its holding assets due to the theft of funds from its Ethereum wallet.
The investigation coincides with the exchange’s restructuring initiatives. Zettai, the parent company of WazirX, is currently negotiating with 11 crypto exchanges and trading firms to obtain emergency funding.
Furthermore, on October 4, WazirX disclosed that it would establish a Committee of Creditors (COC) as part of the restructuring procedure for Zettai Pte Ltd.