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The cryptocurrency world is experiencing a new shock. Leading exchange WazirX was hit by a $230 million heist. This major security breach deeply affected WazirX’s financial structure and turned attention to Binance, which holds a significant amount of WazirX tokens. However, the complex legal relationships between the two companies make rescue efforts even more challenging.
Behind the Heist
On July 18, WazirX’s Ethereum network Safe Multisig wallet was targeted by hackers. This attack exposed vulnerabilities in the exchange’s security systems and led to a significant loss of user funds. Shortly after, it was suggested that North Korea’s infamous Lazarus Group was behind the attack. The FBI also stepped in, launching an investigation to explore the dimensions and details of this cyberattack.
WazirX sought help from Binance in this difficult situation. However, this request for assistance became more complicated due to the tense legal processes between the two companies. The $80 million worth of WazirX tokens held by Binance limits the exchange’s ability to compensate user losses. Past statements by former Binance CEO Changpeng Zhao regarding WazirX’s ownership and WazirX founder Nischal Shetty’s opposition to these statements have increased the tension between the two companies.
Reward Program and Recovery Efforts
WazirX launched a program offering a $23 million reward for information that could help recover the stolen assets. This program will be active for three months starting from July 21 and may be extended depending on the recovery process. WazirX’s move is seen as part of a strategy to mitigate the effects of the heist and regain customer trust.
The relationship between Binance and WazirX has been quite turbulent for several years. In 2019, it was believed that Binance had acquired WazirX. However, in 2022, then-Binance CEO Zhao denied this acquisition after WazirX’s assets were frozen due to a money laundering investigation. Shetty, on the other hand, claimed that Binance had control over WazirX, opposing this statement. In 2023, Binance further escalated tensions by terminating wallet services for WazirX’s parent company, Zanmai Labs.
How WazirX will navigate this challenging period will depend on the outcome of its discussions with Binance and the effectiveness of the reward program. The legal battle between the two companies continues to complicate efforts to find a swift resolution to the crisis. This latest development in the cryptocurrency world increases uncertainties for investors and users.
