The recent hack of a WazirX wallet under Liminal Custody’s oversight has resulted in a loss of over $230 million, significantly impacting India’s crypto activities. In a statement to Gadgets360, Liminal denied WazirX’s allegations that the breach was due to a failure in Liminal’s screening system. Over the weekend, Liminal stated that its forensic investigation has found no evidence attributing responsibility for the attack to its systems.

Liminal Custody’s Statement

Liminal, drawing insights from its internal investigations, has emphasized that the sophisticated attack appears to have originated from an external source, rather than from within its systems.

“Our initial assessment indicates that Liminal’s platform, infrastructure, wallets, and assets remain secure. We reiterate that our platform continues to operate seamlessly and has been processing transfers and withdrawals for all our customers. It securely protects all assets including significant funds that continue to remain held on our infrastructure by the impacted customer (WazirX), as well,” the company spokesperson told Gadgets360.

“This underscores the crucial need for comprehensive security measures across platforms,” the spokesperson added.

WazirX’s Allegations Against Liminal

In a blog update published last week, WazirX alleged that Liminal could not prevent the withdrawal of funds because its multi-party computation (MPC) wallet and firewall security provision failed to screen non-whitelisted addresses.

The Mumbai-headquartered exchange went on to add that the flow of transaction to the hacker’s wallet was facilitated through a breach of Liminal’s infrastructure. Citing results of its own internal investigation, WazirX has claimed that no malicious malware or compromise was identified on its own systems.

The situation is unfolding dramatically as WazirX and Liminal find themselves in a standoff, each party disputing the other’s claims. WazirX customers, meanwhile, continue to hope for the exchange to restart services on its platform soon as the market is currently under a bull run and the suspension of trading and withdrawal services on WazirX are causing them more financial losses.

WazirX partnered with Liminal Custody in January 2023 to manage its wallets. Presently, both parties alongside several members of the crypto community are joining in efforts to try and recover the stolen funds.

The trading, withdrawal, and deposit services on WazirX continue to be on hold. While the industry analysts suspect North Korea’s infamous Lazarus Group is behind this hack, confirmation on the same remains awaited.