Wazir X Hackers Prepared 8 Days Before Attack, Fraudsters Register Fee for USDT: Asia Express

The WazirX hackers were preparing for the $235M heist 8 days ago.

The hackers behind the $235 million Wazir X crypto exchange breach began preparing onchain at least eight days ago, Polygon Labs' security chief said.

WazirX, one of India's largest cryptocurrency exchanges, lost hundreds of millions in the Multisig Wallet hack on Thursday, July 18, blamed on North Korean hacking firm Lazar Group.

Polygon Labs Chief Information Security Officer Mudit Gupta suggests that the hackers began “rehearsing” the hacked OnChain more than a week before the attack.

It was started by hackers who modified MultiSig into a malicious version and later allowed them to leak, Gupta explained in a July 18 post on X.

Tarun Mangukia, co-founder of payments platform Copperx, believes the hackers modified WazirX's secure implementation framework.

“Why did you improve it instead of just draining it?” Gupta asked rhetorically.

“Exfiltration takes time and a lot of transaction. They all couldn't get the required private keys and depended on signature phishing, which they often couldn't do without getting caught.”

In a follow-up post on X, Wazir X described the attack as “an act of incompetence beyond our control”.

“We have already blocked some deposits and found the relevant wallets for recovery,” he added.

The exchange announced a temporary suspension of withdrawals after the hack.

India's crypto sector holds its breath for tax relief

Elsewhere in India, the cryptocurrency industry is eagerly hoping to get relief from the country's strict crypto tax rules, with Indian Finance Minister Nirmala Sitharaman set to present the Union Budget on July 23 of the next fiscal year.

Starting in 2022, India has slapped one of the world's toughest tax regimes on cryptocurrency, with a flat 30% capital gains tax on profits from digital assets, including non-volatile tokens (NFTs).

Additionally, a 1% tax deducted at source (TDS) is levied on crypto transactions.

The Indian crypto sector has been advocating for a reduction in the TDS rate to 0.01% in the upcoming fiscal.

Sumit Gupta, CEO of CoinDCX, an exchange that participated in the pre-budget consultation, said that this adjustment is seen as crucial to recapture business that has moved to offshore exchanges due to the current heavy tax.

“We have also demanded a reduction in the TDS rate… from 1% to 0.01%,” Gupta said in a statement shared with the magazine.

We have also demanded that the capital gains tax rate be reduced from 30 percent to the correct rate. [income bracket] of the assessee”.

Since these tax measures were included in Sitharaman's 2022 budget speech, Indian crypto exchanges have seen a sharp decline, with transaction volume dropping by 97 percent and active users down by 81 percent, according to a recent report by the National Academy of Legal Studies. Research (NASLAR).

According to a NASLAR study, the national exchequer is losing about $700 million (59 billion Indian rupees) in tax revenue due to reduced activity on India's major exchanges.

The study suggests that reducing the TDS rate to 0.01% could double the country's tax revenue in the coming fiscal year.

So far, India has had a warm-and-cold relationship with cryptocurrency, maintaining a positive outlook on the potential of blockchain technology.

In the year The growth of the industry hit a wall in 2020 when the Reserve Bank of India, the central bank, banned financial institutions from servicing crypto businesses in 2018.

More arrests made in Hong Kong in USDT scam for fake currency.

Hong Kong authorities have arrested three more suspects for allegedly selling counterfeit silver notes in the stablecoin Tether (USDT).

Local media reported on July 15 that a 44-year-old businessman was defrauded of $399,000 (HK$3.11 million) in USDT.

The businessman then received three bundles of 1,000 Hong Kong dollar notes.

Suspects met the victim at a hotel in the main shopping district of Thim Sha Tu before taking them to complete the deal in Mong Kok district, a 10-minute drive away.

Police have arrested three suspects, a woman and two men, on suspicion of obtaining property by deception and possessing fake currency notes. If convicted, they could face 10 to 14 years in prison.

This case is similar to an incident in April 2024 where the victim was defrauded of $128,000 (HK$1 million).

The issue includes “hell notes,” which are informal paper currency burned in traditional ancestor rituals. These notes represent gifts given to ancestors in the afterlife.

A 35-year-old man was shown a stack of these “notes from hell” in exchange for USDT at Tim Sha Tusu's shop. But the alleged fraudsters refused to hand over the notes and disappeared.

Local media reported that in May (a month after the victim reported to the police), three suspects were arrested and 3,000 notes of Hell were seized.

According to the local media reports, fake fiat scams are on the rise in the city. From January to April 2024, police collected $326,130 worth of counterfeit notes.

Insider crypto trading in South Korea can now land you in prison for life.

South Korea's cryptocurrency investor protection law will officially go into effect on Friday, July 19.

In the year The “Virtual Assets Users Protection Act” enacted on July 18, 2023 aims to protect the assets of crypto investors and prohibit unfair business practices.

The law mandates that user deposits be held separately from company funds by a regulated financial institution. To further protect users' assets, the law requires a large portion of these assets – 80% or more of their economic value – to be kept offline, for example in a cold wallet.

Crypto businesses are also required to take measures to cover liabilities arising from hacking or system failures. These measures include obtaining insurance or setting aside reserves covering at least 5% of the economic value of offline assets.

The Act prohibits activities such as the use of undisclosed information for trading (insider trading), market manipulation and fraud. Violations can result in severe penalties, including criminal charges and fines.

Criminal penalties can increase to at least one year in prison, a fine of three to five times the illegal profits. If the illegal profits exceed $3.6 million (5 billion Korean won), the maximum penalty is life imprisonment, with a fine of double the illegal profits.

Hackers send stolen crypto to the marketplace by contacting the Cambodian Prime Minister's family

North Korea's Lazarus Group is suspected of embezzling at least US$35 million in Tron through online Cambodian marketplace Huione Guarantee this month.

Blockchain investigator ZachXBT linked these illegal funds to $305 million worth of bitcoins stolen from DMM, the Japanese cryptocurrency exchange that suffered its biggest breach of the year in late May.

According to ZachXBT, offchain indicators and laundry methods suggest that the Lazarus group is the main suspect in the DMM hack.

Huione Guarantee is a multi-billion dollar marketplace owned by Huione Group, which also operates foreign exchange business Huione Pay.

An investigation by blockchain forensics firm Elliptic revealed that Hun Tho, a cousin of Cambodian Prime Minister Hun Manet, is one of Huion Pay's directors.

Hun To was allegedly suspected of money laundering and drug trafficking by Australian authorities a decade ago. Hun To denied the allegations.

In a separate report on July 15, Reuters found that Huione Pay had received about $150,000 from North Korean hackers.

Reuters cited blockchain analysts as saying Huione Pay received funds from an anonymous digital wallet used by Lazarus to deposit stolen assets from three different crypto firms.

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John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed to the crypto media outlet Forkast as an editor and covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.