What Role Did Liminal Play in the Breach? Are the Accusations Justified?

A major crypto scandal has unfolded in India as WazirX, the country’s largest cryptocurrency exchange, and its digital custody partner, Liminal, have become involved in a bitter dispute over a $235 million security breach that occurred in July. The incident has shocked the crypto community, raising serious questions about the safety of digital assets and the future of the industry.

What caused the breach? Who is to blame? And most importantly, where did the stolen funds go? These questions remain unanswered as the two parties continue to point fingers and trade accusations.

Here’s some clarity on the situation.

The Blame Game Is On

The dispute began when WazirX accused Liminal of being at fault for the cyberattack. Liminal, however, has firmly rejected these claims, arguing that the breach is ongoing and that WazirX should be held accountable.

Despite the accusations, WazirX continued to store large amounts of assets with Liminal. In a statement on October 22, Liminal revealed that 75 days after the breach, WazirX still had over $175 million in assets on its platform, with around $50 million remaining in wallets connected to Liminal.

Liminal’s Response: Accusations of “Disinformation”

Liminal responded by calling WazirX’s claims a “disinformation campaign.” The custody firm explained that it does not have the power to initiate transactions involving WazirX’s funds on its own, meaning that only the WazirX team can authorize any transfers. Liminal also pointed out that WazirX had provided 240,000 wallet addresses during a court-supervised debt restructuring, suggesting these addresses might have been used to mislead users.

Controversy Over Fund Transfers

The situation escalated when WazirX was accused of moving $72 million in stolen cryptocurrency to other exchanges, such as Bybit and KuCoin. WazirX CEO Nischal Shetty defended the transfers, saying they were legitimate steps in switching to a new custodian. However, the moves sparked concerns over transparency, with many questioning whether enough information had been disclosed.

While both parties still try to argue the facts, the nature of the WazirX security breach is still unclear. As millions remain unidentified or uncatered for, and users are left in limbo, this case demonstrates the relevance of trust and security within the novel and quickly growing crypto environment.

• Also Read :
•   WazirX Scandal Exposed: Secret $75M Transferred to Bybit and KuCoin
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Who do you believe is responsible for the WazirX breach?