Goodmorning and Happy Saturday everyone!

While the markets take a well needed rest from completely annihilating the past weeks gains (pissing off every degenerate tech trader in the process), here’s a ridiculous conversation starter for you this weekend:

If OneCoin, BitConnect, and the FTX Debacle weren’t enough for me to stay away from crypto, India's largest crypto exchange, WazirX, just put the nail in the coffin. 

(Source: Giphy) 

WazirX, got hit with a hack on Thursday that legit makes the $50 your friend “borrowed” and never returned look like cheap change. Because in a blink of an eye, this hack resulted in a total $230 million worth of crypto evaporating into the ether. 

(Source: Crypto Briefing) 

According to the Web3 security firm Cyver, the hack targeted WazirX’s multi-signature wallet, Safe Multisig, on the Ethereum network. For the non-crypto bro’s reading this, a multi-sig wallet is like a vault that needs multiple keys to open. 

(Source: Giphy) 

Specifically, this wallet required three out of five WazirX signatories and one from Liminal, a digital asset custody service, to approve transactions. Think, needing several managers to agree before making a big withdrawal from the company’s bank account.

(Source: Economic Times) 

However, despite these layers of security (*cough cough* decentralized finance’s main selling point), the hackers managed to swipe the private keys and make off with a whopping $230 million. The stolen funds include $96.7 million in Shiba Inu (SHIB) tokens, $52 million in Ethereum (ETH), $11 million in Polygon (MATIC), and $7.6 million in Pepe (PEPE)— which is like, basically, a shopping list for an average crypto whale. 

(Source: Giphy) 

But what’s really interesting about this debacle is how seismic this hack is for WazirX’s financials. The exchange's total reserves were around $500 million as of June. So with this devastating hack, nearly half their cash reserves vanished overnight. Ooof… not good. 

(Source: India Times) 

So as expected, following the magnitude of the breach, WazirX hit the pause button on INR and crypto withdrawals and according to reports, they’ve also filed a police complaint while working with India’s Cyber Crimes Unit and the Indian Computer Emergency Response Team (CERT-In).

(Source: Economic times) 

But even with the effort to recover the assets, what’s done is done unfortunately. And while this hack is a cutthroat reality check for WazirX, it’s also another stain on the entire crypto industry. 

Especially since this comes just two months after Japan’s DMM Bitcoin exchange lost over $300 million to hackers. So as we can see, it’s a rough time to be a crypto investor in Asia (and pretty much everywhere else), with trust in the system hitting new lows. 

(Source: Reuters) 

For instance, Joanna Cheng, Associate General Counsel at Fireblocks, nailed it when she said, “There is no crypto-specific regulation in India so far, and the industry would benefit from clear regulatory expectations on issues like security standards, risk management, and consumer protection.”

In other words, the crypto world desperately needs some grown-up supervision. Without regulations, we’re all just hoping the next exchange doesn’t get hacked or turn out to be a scam backed by some whiz kid dork with curly hair. 

(Source: Metaschool) 

But in the meantime, WazirX is doing damage control and has promised transparency as they work to recover the stolen funds. They’re collaborating with forensic experts and law enforcement, and other crypto exchanges have expressed their support. Sumit Gupta, co-founder of CoinDCX, another major Indian exchange, has offered to help WazirX’s customers, showing a bit of camaraderie amidst the heartache. 

(Source: Yahoo Finance) 

So unlike all the other horrific scams and hacks we’ve seen in crypto over the years, at least WazirX is trying to do right by their customers. But even with that, let’s be real: until there’s more regulation and better security across the board, these hacks will likely keep happening. 

(Source: Giphy) 

Crypto is still the wild wild west, and hackers who have any skills to write home about will be fueled by this “get rich quick” scheme that just took place on WazirX. Meaning, if you’re into crypto please stay vigilant. 

The WazirX hack is a stark reminder that the crypto world is still very much no man’s land… And while every crypto youtuber preaches the undeniable potential for high returns, remember that the risks are just as equally high (if not higher). 

 

(Source: Giphy) 

So with that said, if you’re a crypto person, stay informed and be cautious, because when it comes to cryptocurrency - no one is safe, not even the big guys.

But if you’re not a crypto person (like me), well, then have a relaxing and restful weekend knowing that your money wasn’t siphoned off to some 23 year old hacker in his moms basement. Cause you know… that would suuuuck. 

(Source: Giphy) 

Stocks.News doesn't hold any positions in companies mentioned.