WazirX Ends Custody Relationship With Liminal, Is Moving Funds to New Multisig Wallets

• WazirX said it is ending its relationship with Liminal and moving its funds into new multisig wallets.
• The Indian crypto exchange is facing heat from customers for the inability to withdraw their funds and an alleged lack of transparency after a $230 million exploit.
• WazirX said the $230 million July hack was related to a multisig wallet using Liminal’s digital asset custody service. Liminal said its infrastructure was not breached.

WazirX is ending its relationship with custody provider Liminal Custody after suffering a $230 million exploit last month that saw 45% of total customer funds vanish, the Indian cryptocurrency exchange said in a post on X on Wednesday.

👋 Tribe! We want to keep you informed about the measures we're taking to safeguard crypto assets on the exchange.

We are in the process of migrating the remaining assets held with Liminal to new multisig wallets. This step is essential to ensure maximum security of the assets… pic.twitter.com/3C8ort5P7D

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 14, 2024

Liminal and WazirX blamed each other for the success of the attack in July, leaving users in the dark over the security of their funds.

“We are in the process of migrating the remaining assets held with Liminal to new multisig wallets,” WazirX said.

“This step is essential to ensure maximum security of the assets in light of recent events. While we believe our interface and systems remain uncompromised, the same cannot be said for the custodian’s interface post the July 18th incident, prompting this precaution.”

Liminal said it is cooperating in the process.

“The client could have removed the funds immediately post the incident,” a Liminal spokesperson said in a WhatsApp message. 

“They’ve always had the ability to exercise full control of wallets, regardless of Liminal or the Liminal key. We have supported and will continue to support the client in moving their wallets and assets as requested.”

The exchange faced criticism from customers for their inability to withdraw funds and an alleged lack of transparency. Co-founder Nischal Shetty asked customers to give the exchange some time to resolve the issue.

These efforts take time, please bear with us as we navigate through this difficult period 🙏 https://t.co/ggtb1Ryeqa

— Nischal (Shardeum) 🔼 (@NischalShetty) August 13, 2024

“We are exercising extreme caution in how and when we move these assets, considering the complexity involved,” the post on X said indicating the need to take precautions to avoid another attack while moving the funds. 

“For transparency, we’ll publish the list of all new wallets once the migration is complete.”