WazirX Introduces Bounty Program for Recovery of Stolen Assets

Indian cryptocurrency exchange WazirX has introduced a substantial bounty program, aiming to recover assets lost in a recent cyberattack. The exchange faced an attack on one of its multisig wallets, resulting in a significant loss of $234 million. Initially offering a modest reward of $10,000 in USDT for useful information to freeze the stolen funds and a 5% reward on recovered amounts, WazirX received feedback criticizing the reward as insufficient.

In response to the critique, WazirX has increased the bounty to a remarkable $23 million for successful asset recovery. This amplification is designed to encourage white hat hackers and security professionals to aid in tracing and retrieving the pilfered funds.

The bounty program will extend for three months, with a potential for further continuation based on the progress made and the demands of the recovery process.

Incident Background

On July 18, a security breach occurred at WazirX, leading to a substantial outflow of funds from one of its multisig wallets. Following the breach, all withdrawals were temporarily suspended to prevent additional losses. Co-founder Nischal Shetty clarified that the breach wasn't a result of phishing but involved intricate multi-signature processes.

Shetty detailed that three WazirX team members, each using distinct hardware wallets, signed the transactions. Despite their physical segregation and secure measures, the attack culminated in a final signature from Liminal, WazirX's custody provider.

Shetty underscored that there was no compromise of hardware keys from the WazirX team, and the signing process by Liminal is currently under thorough investigation.

Ongoing Investigations and Measures

WazirX is collaborating with forensic specialists to conduct an extensive audit of the compromised devices and the signing procedures. The investigation aims to ascertain if any WazirX devices were compromised or if the breach exploited vulnerabilities in the Liminal system.

The forensic assessment will shed light on how the malicious payload was signed and offer insights into the execution of the attack. Shetty affirmed that the WazirX team is diligently working to address the issue and restore confidence within the community.