WazirX Crypto Heist: Hacker Moves $6.5 Mn Worth Ether To Tornado Cash

Investors are on tenterhooks as the hacker entity responsible for the infamous WazirX $230 Mn crypto heist has begun funneling millions of dollars in virtual assets, blockchain data shows.

According to blockchain security firm PeckShield, about 2,600.1 ether (ETH), worth around $6.5 Mn, were moved in 26 transactions, from a wallet tied to the WazirX breach in July, using a Tornado Cash router.

Tornado Cash allows crypto holders to exchange tokens while obscuring their wallet addresses on different blockchains, effectively cleaning the trail of funds. While the platform was banned by the US government in 2022, it is still operational in several jurisdictions, including North Korea.

Data tracked by Etherscan showed that the transactions commenced on Tuesday (September 2) — the same day WazirX cofounder Nischal Shetty held a town hall meeting about its restructuring plans.

CoinDesk reported the development first.

The development comes at a time when WazirX is looking for “white knights” to bail it out after it was hit by a cyberattack, allegedly by North Korean hackers, that drained the platform out of nearly $235 Mn in crypto assets, representing 45% of total user funds.

In the aftermath of the attack, WazirX halted withdrawals and trading on the platform. It has since lifted the suspension on withdrawals and trading will likely remain suspended until September 9.

Meanwhile, in a post on X today, WazirX said that users will be able to withdraw 66% of INR balances on the platform, starting September 3. Users were to be allowed to withdraw up to 33% of their INR balances till September 8, as per the original plan. Wazir X said it decided to prepone the access to up to 66% withdrawals to support its customers.

WazirX’s legal advisors said Tuesday that it is unlikely that users will be made whole even after the restructuring, with the crypto exchange expecting to recover only 55-57% funds.

Last week, WazirX parent Zettai moved the Singapore High Court seeking a moratorium as part of its restructuring plans. WazirX will either sell off some assets or form strategic partnerships with investors under the scheme of arrangement.

Back at home, WazirX is facing increasing scrutiny, with CoinSwitch threatening to take legal action against the hacked crypto exchange to recover 2% of its trapped funds.

Further, frustrated customers have taken to social media and asked the WazirX leadership to pay the losses out of their pockets. However, Shetty has said that is unlikely to happen, citing the ownership dispute with Binance.