WazirX And His Teaching: Beware Your Exchange

WazirX is a cryptocurrency exchange little known in Europe, but among the most popular in Asia, especially in India. Last week, it was attacked by a group of hackers who managed to steal some $230 million in digital assets from the site. The exchange immediately blocked all withdrawals, both in cryptocurrency and fiat currencies, to protect the security and savings of users. It all started with the breach of a multisig wallet and the amount of assets at risk is still uncertain at the time of writing - almost a week later -.

The Connected Market Repercussions

The episode was indeed onerous for the tokens that were held in higher measures on the exchange. Shiba Inu, the token that was stolen in the largest quantity, has lost 10% over the past few days and has seen a genuine collapse in its value at the turn of last week. It is unclear how connected the two facts are, but it is impossible not to read a connection.

The concerns following the episode are, of course, numerous, including for the European and American markets, which are very marginally affected by this breach. This is due to the fact that the action of the hackers is something historical. Indeed, the malicious hackers managed to take control of a wallet that, by definition, needs numerous signatures to authorise the movement of the assets it contains.

WazirX's Prompt Reaction

The SHIB shortfall is as high as 5.4 trillion tokens as a result of the attack. It has to be said that WazirX promptly triggered its defences, managing to freeze the e-wallet and save a large part of its amount by blocking all transfers until further notice, but by the time the operators intervened, quite a bit of damage had already been done, as they say. The episode cannot but provoke us to reflect on the security of exchanges.

The WazirX Breach and the Countermeasures of the Other Exchanges

While WazirX continues its investigation and has offered a rather large bounty (around $23 million) to anyone who provides information on stolen digital assets or actively cooperates in their recovery, the other exchanges are checking their security measures and, if necessary, reinforcing them. As we all know, all these services constantly run the risk of suffering such attacks, which inevitably spill over into the savings of their users. So how can an investor protect himself? First of all, he should know that not all exchange crypto are safe in the same way.

Maximum Attention to Security

There are good practices that can help us invest safely, without zeroing out the risk, which is never really possible. First and foremost, we should choose a reliable, well-known intermediary with a proven track record of good safekeeping practices. Second-tier intermediaries, as we can define WazirX, tend to be more exposed. We never leave non-trading capital on dedicated platforms, otherwise we would unnecessarily expose it to risk.

Secondly, let's dedicate ourselves to self-custody, i.e. the personal protection of our wallet. It is a practice that might frighten some people but actually makes us less attackable. Indeed, it is easier for a group of talented hackers to target an exchange than the individual e-wallet of one user among millions. Major cryptocurrency buying and selling services, from Binance to Bitget, employ very expensive and sophisticated security systems that are frequently updated and difficult to attack.

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