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The Indian cryptocurrency exchange, WazirX, lost more than $230 million in cryptocurrency in July when suspected North Korean hackers stole a portfolio of tokens including nearly $100 million in Shiba Inu and $50 million in Ether. The exchange lost more than 40% of its assets and looks likely to close, leaving users significantly out of pocket.
Although the perpetrators have yet to be identified, the hack bears the hallmarks of other attacks by known North Korean hackers, with previous targets including the crypto gambling giant Stake.com, which had just over $40 million stolen a year ago.
Stake Hacked
Stake.com lost $41.3 million to unauthorized transactions in September 2023 after the private key belonging to one of the online casino’s sites was leaked. In that instance, the money taken was from Stake.com’s wallet, and individual users were not affected, other than suffering a few hours of downtime.
However, Stake.com is considered one of the leading lights in crypto gambling, and that they lost more than $40 million of their own money shows how important it is to choose reliable and secure crypto sites.
Players are advised to use recommended gambling sites that have been vetted and their security protocols checked. Crypto editor Narathip Suk suggests checking the gambling licenses that companies hold: details of which should be readily available on the website. Funds should be stored in a cold wallet, away from exchanges, and private keys must remain private to prevent unauthorized transactions.
North Korean State Hackers Blamed
Immediately following Stake.com’s hack, the FBI attributed the theft to the North-Korean-based hacking group, Lazarus. Lazarus is a DPRK state-backed hacker group that has been operating since 2009 and the group is believed to be responsible for laundering over $200 million of crypto between 2020 and 2023 alone, having stolen a staggering $3 billion in crypto assets.
The Lazarus Group
Although it has not yet been confirmed, many believe that the WazirX hack was also initiated by North Korean hackers, potentially even the same Lazarus Group. In July, more than $230 million of funds were stolen from the exchange’s wallet, accounting for approximately 45% of their assets. Trading was stopped and users have been unable to access any of their remaining funds since.
WazirX took some unusual steps while making attempts to recover, including going cap in hand to other exchanges asking for their help in reimbursing users, and even setting up an opinion poll asking users to choose their preferred reimbursement model. They have also been caught up in an ongoing feud with custody provider, Liminal, over whose system had been breached and who, therefore, was ultimately responsible for the lost funds.
Security Best Practices When Using Crypto
In some respects, cryptocurrency is more secure than fiat. Payments are pseudonymous and are encrypted using public and private keys. This makes individual payments virtually impossible to hack or infiltrate. However, users do need to follow best practices to ensure the safety of their assets, and this includes exchanges and companies.
Cold Wallets
Holders of large portfolios are best using cold wallets, which only connect to the Internet to complete transactions, and are arguably better served by splitting funds across multiple wallets. If money is lost from one wallet, the user will still have some funds remaining in other storage accounts.
Avoid Phishing Scams
Always ensure you use legitimate sites, including exchanges, wallets, online casinos, and even online shopping sites. Don’t follow links you don’t trust and check the credentials of the websites. Phishing scams are commonly used by hackers and thieves. These attacks involve links, typically sent by email or direct message, that point to spoofed websites. Users enter their account credentials, which the fake site owners can use to log onto real sites and access cryptocurrency.
Ensure Security Credentials
Fake crypto websites do exist, and you might see links on social media and even in online ads. Ideally, you should manually enter the URL of any website you want to visit to avoid being the victim of a fake site. Look for appropriate licenses, and check the security policies before sending money or depositing crypto into your account.
Keep Details Secure
Although sharing a wallet address is considered safe, and wallet addresses are generally visible on public blockchain networks, you shouldn’t share any other wallet or account details. Most users know not to share account usernames and passwords, but this also goes for recovery phrases and private keys. Because it is difficult to hack crypto payments, social engineering is a commonly used method of illegally acquiring crypto funds.
Report It
And, if you do lose money or you suspect you’ve fallen victim to a scam or hack, you should report it immediately. Although it is difficult to retrieve lost funds, it does sometimes happen, and there are instances where other groups might step in to reimburse those who have lost cash.
Image: Unsplash
