Key Points
- Delhi Police arrested SK Masud Alam for allegedly facilitating a $235 million breach of WazirX by creating and selling a fake account used in the exploit
- WazirX announced a comprehensive recovery strategy including platform reopening, new service launches, and potential “White Knight” partnerships to compensate creditors
Investigation Breakthrough and Arrest
Delhi Police made a significant breakthrough in the WazirX crypto exchange breach investigation with the arrest of SK Masud Alam from Bengal. Alam allegedly created a fake account under the alias “Souvik Mondal” and sold it via Telegram to M. Hasan, who executed the $235 million exploit. Authorities have seized three laptops belonging to WazirX’s authorized signatories to investigate potential multisig wallet misuse.
Custody Provider Controversy
While WazirX has fully cooperated with authorities by providing KYC data and transaction records, Liminal, the digital asset custody provider, faces criticism for non-cooperation. The Indian Cyber Crime Coordination Centre (IFSO) found no evidence of unauthorized access within WazirX’s systems, but Liminal’s alleged failure to provide crucial information has hampered the investigation. This development has intensified the ongoing dispute between WazirX and Liminal over responsibility for the breach.
Recovery Strategy and Future Plans
WazirX has unveiled a multi-faceted approach to recover funds and compensate creditors. The strategy includes:
- Reopening the trading platform to generate revenue through trading fees
- Launching new services including a DEX, staking options, OTC desk, and futures trading
- Pursuing legal channels to recover lost and illiquid assets
- Exploring “White Knight” partnerships for rescue financing
The exchange aims to share generated revenues with creditors while expanding its service offerings to attract users and stabilize operations.
