WazirX Ends Relationship with Custody Provider Liminal Following Major Exploit
WazirX, one of India’s leading cryptocurrency exchanges, has announced the termination of its partnership with Liminal Custody. This decision comes in the wake of a significant security breach that occurred last month, resulting in the loss of approximately $230 million in customer funds. The incident, which saw 45% of total customer assets disappear, has raised serious concerns about the security measures in place at both the exchange and its custody provider.
In a recent post on X (formerly Twitter), WazirX detailed the ongoing challenges faced after the exploit, emphasizing the need for heightened security protocols. The exchange stated, “We are in the process of migrating the remaining assets held with Liminal to new multisig wallets.” This migration is deemed crucial to safeguard customer funds, especially in light of the disastrous events that unfolded in July.
Blame Game and Security Concerns
The fallout from the attack has led to a contentious exchange of blame between WazirX and Liminal. Both parties have accused each other of failing to prevent the breach, leaving users uncertain about the safety of their investments. WazirX noted, “While we believe our interface and systems remain uncompromised, the same cannot be said for the custodian’s interface post the July 18th incident.” This acknowledgment highlights a significant gap in trust between the exchange and its former custodian.
Liminal, on its part, has stated that it is fully cooperating with WazirX during this transition. A spokesperson for Liminal commented, “The client could have removed the funds immediately post the incident. They’ve always had the ability to exercise full control of wallets, regardless of Liminal or the Liminal key.” This statement raises questions regarding the communication and control that WazirX had over its assets at the time of the attack.
Customer Backlash and Transparency Issues
In the aftermath of the exploit, WazirX has faced significant backlash from its user base. Customers have expressed frustration over their inability to withdraw funds and a perceived lack of transparency from the exchange regarding the situation. Many users have voiced concerns about the security of their assets, particularly given the scale of the financial loss.
Co-founder Nischal Shetty has responded to the criticism by urging customers to be patient while the exchange works to resolve the ongoing issues. He stated, “We are exercising extreme caution in how and when we move these assets, considering the complexity involved.” This caution reflects the need to ensure that another security breach does not occur during the migration process.
Future Steps and Commitment to Security
WazirX has committed to enhancing its security measures and providing greater transparency to its users. The exchange plans to publish a list of all new wallets once the migration of assets is complete. This step is intended to reassure customers that their funds are being managed securely and that the exchange is taking the necessary precautions to protect their investments.
As WazirX navigates this challenging period, the focus will be on rebuilding trust with its customers and ensuring that robust security protocols are implemented moving forward. The incident serves as a stark reminder of the vulnerabilities present in the cryptocurrency space and the importance of rigorous security practices for exchanges and custodians alike.
Conclusion
In conclusion, the end of WazirX’s relationship with Liminal Custody marks a significant turning point for the exchange as it seeks to recover from a devastating exploit. The path ahead will require transparency, improved security measures, and a commitment to customer satisfaction. As the cryptocurrency landscape continues to evolve, exchanges must prioritize the safety of user funds to maintain credibility and trust within the community.