WazirX hack update: Exchange plans scheduled maintenance to restore user balances

Indian crypto exchange WazirX has provided details about an upcoming maintenance period aimed at restoring account balances and reversing certain trades.

In a post on X, WazirX announced that the maintenance will occur from 6:00 PM IST on August 15 to 2:00 AM IST on August 16, during which all services on the platform will be temporarily suspended.

This decision follows a failed restoration plan that triggered massive community outrage after a $230 million cryptocurrency hack. The company aims to restore the account balances of users who have been waiting to regain access to their funds, which have been locked for almost a month.

Withdrawals remain uncertain

By August  16, 2:00 a.m. Indian Standard Time, WazirX users are expected to see their balances reverted to what they were on July 18, 2024, at 1 PM IST. The exchange had previously announced that it would reverse all trades and deposits between July 18 and July 21.

According to the platform, this move would ensure an “equitable outcome for users,” who have constantly urged the exchange to release their funds for months. While the balances will show up on affected accounts, the exchange hasn’t confirmed if withdrawals will begin as well.

Users will receive an email containing details of any trades that have been reversed as a part of the process.

Since announcing its plan to restore balances on August 8, the exchange has tried to cool down its user base with some minor updates. In an August 13 post, WazirX said it was working with “legal experts” to devise a plan to enable withdrawals.

However, the lack of transparency regarding its plan wasn’t well received by the community, and users complained about the delayed resolution. 

Some users also mocked the 8-hour maintenance that the exchange was undergoing at the time of publication, calling it out as just another ploy to delay resolution.

The story so far

The July 18 attack on WazirX resulted in over 15,000 Ethereum and many other tokens being drained from one of the exchange’s multi-sig wallets. The scale of the attack, which affected 45% of customer funds, crippled the platform, which was unable to maintain a 1:1 collateral.

In its post-hack report, WazirX said the breach resulted from a “discrepancy between the data displayed” on the interface of Liminal, its cryptocurrency custody service provider, adding that its systems were not compromised.

Liminal’s report suggested otherwise, claiming that its systems remained unaffected and the wallet linked to the attack was created by WazirX before being imported to Limina’s platform.

The contrasting reports drew further criticism from industry leaders, such as Mudrex CEO Edu Patel, who called WazirX’s post-hack recovery efforts “deeply flawed.” 

Further adding fuel to the fire was the exchange’s controversial recovery plan, which suggested distributing losses equally among all users by allowing immediate access to just 55% of a user’s entire portfolio. The plan would encompass all users, including those who weren’t holding the affected assets.

The move was met with immediate backlash, with the community criticising the plan as unfair.

As of now, it has yet to be seen if everything ends well for WazirX users. Recovery efforts from the exchange so far have been an FIR with the Delhi police on August 6 and a bounty program, which the exchange claims has received 344 entries.

Blockchain investigator ZachXBT has speculated the involvement of the infamous North Korea-backed Lazarus group as having played a role in the attack. However, it has not been confirmed.

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