WazirX accused of running “persistent disinformation campaign” by Liminal while users wait for court updates

WazirX last week announced the disclosure of over 240,000 wallet addresses with balances, which were held under it [File]
| Photo Credit: AP

Indian crypto exchange WazirX has been accused of running a “persistent disinformation campaign” by Liminal, the third-party custody solutions provider, as the exchange pushes ahead with restructuring through the Singapore legal system after the July cyberattack.

WazirX last week announced the disclosure of over 240,000 wallet addresses with balances, which were held under it. This was part of an affidavit that was to be filed with the High Court of Singapore.

The cause of the cyberattack and theft of assets worth over $230 million is not yet known, with WazirX and Liminal both blaming each other for security lapses.

However, Liminal claimed in a statement that WazirX was continuing to use its services despite criticising it publicly.

“As an immediate response to the breach, WazirX blamed Liminal Custody and made media announcements on August 14, 2024 stating that it had ‘terminated’ its contract with Liminal. However, far from this posturing WazirX continued to use Liminal’s infrastructure to access and manage their remaining user funds,” said Liminal in a blog post on October 22, adding, “Even 75 days after the hack, WazirX was still holding over USD 175 Million in assets on Liminal’s platform. In fact, despite their accusations, as of today, approximately USD 50 Million of their user assets continue to remain on wallets accessed via Liminal Infrastructure.”

In response to The Hindu’s email, WazirX said that it was working to move the remaining assets held with Liminal to new multisig wallets.

“While we believe our interface and systems remain uncompromised, the same cannot be said for the custodian’s interface post the July 18th incident, prompting this precaution. We are exercising extreme caution in how and when we move these assets, considering the complexity involved but we will publish the details of the wallets once the migration is complete,” said WazirX.

While some social media users claimed that WazirX users’ funds were being moved for malicious reasons, WazirX CEO Nischal Shetty has strongly denied these claims.

“There have been false claims circulating that funds were moved to exchanges to trade! Funds were moved to some exchanges because we are still in the process of onboarding a custodian. This process is taking longer than expected, we need to be thorough in our assessment and carefully explore all options,” he posted on X on October 22.

Though WazirX said it would next be introducing its post-hack Proof of Reserves (POR), users with locked crypto funds criticised the time being taken for the legal proceedings to move forward.