WazirX hackers were preparing 8 days before the $235M theft

The hackers behind the $235 million WazirX crypto exchange breach began preparing onchain at least eight days prior, according to Polygon Labs's security chief.

Hackers preparing for the $235M WazirX theft 8 days prior: reportThe hackers behind the $235 million WazirX crypto exchange breach began preparing onchain at least eight days prior, according to Polygon Labs’s security chief.WazirX, one of India’s largest cryptocurrency exchanges, lost hundreds of millions to a multisig wallet hack on Thursday, July 18, which is being blamed on North Korean hacking organization Lazarus Group. Mudit Gupta, the Chief Information Security Officer of Polygon Labs, suggests the hackers had started “practicing” the hack onchain more than a week prior to executing the attack. It started with hackers upgrading the multisig to a malicious version that would later allow them to drain it, Gupta explained in a July 18 post on X. Tarun Mangukiya, the co-founder of payment platform Copperx, believes the hackers may have tricked WazirX into upgrading its Safe Implementation Skeleton. “Why did they upgrade it instead of just draining?” Gupta asked rhetorically. “Draining takes time and multiple transaction. They likely didn’t have access to all the required private keys and were dependent on signature phishing which they can’t do multiple times without getting caught.” In a follow-up post on X, WazirX has described the attack as a “force majeure event beyond our control.” “We have already blocked a few deposits and reached out to concerned wallets for recovery,” it added. The exchange announced a temporary withdrawal freeze soon after the hack. India's crypto sector holds breath for tax relief in upcoming budgetElsewhere in India, the cryptocurrency industry is eagerly hoping for relief from the country’s stringent crypto tax regulations, with India Finance Minister Nirmala Sitharaman set to present the Union Budget for the next fiscal year on July 23. Since 2022, India has slapped one of the world’s most severe tax regimes on cryptocurrency, with a flat 30% capital gains tax on profits from digital assets, including non-fungible tokens (NFTs). In addition, a 1% tax deducted at source (TDS) is levied on crypto transactions. India's crypto sector has been advocating a reduction in the TDS rate to 0.01% in the forthcoming budget. Sumit Gupta, CEO of CoinDCX, an exchange involved in pre-budget consultations, says this adjustment is seen as crucial to recapturing business that has shifted to offshore exchanges due to current heavy taxation. “We have also requested for a reduction in TDS rate… from 1% to 0.01%,” Gupta said in a statement shared with Magazine. We have also requested for a reduction in capital gains tax rate from 30% to the actual [income bracket] of the assessee.” Since the introduction of these tax measures in Sitharaman's 2022 Budget speech, Indian crypto exchanges have seen a drastic decline, with trading volumes plummeting by 97% and active users decreasing by 81%, according to a recent report by The National Academy of Legal Studies and Research (NASLAR). NASLAR's research found that the national treasury is losing approximately $700 million (59 billion Indian rupees) in tax revenue due to diminished activity on India’s leading exchanges. The study suggests that reducing the TDS rate to 0.01% could potentially double the nation’s tax revenue in the upcoming fiscal year. So far, India has had a hot and cold relationship with cryptocurrency while maintaining a positive outlook toward the potential of blockchain technology. The industry's growth hit a wall in 2018 when the Reserve Bank of India, the central bank, prohibited financial institutions from servicing crypto businesses — a ban that was overturned by the Supreme Court in 2020. More arrests in Hong Kong over fake cash for USDT scamHong Kong authorities have arrested three more suspects for allegedly selling counterfeit banknotes in exchange for stablecoin Tether (USDT). Local media reported on July 15 that a 44-year-old businessman was deceived into transferring $399,000 (3.11 million Hong Kong dollars) in USDT. The businessman then received three bundles of 1,000 Hong Kong dollar notes, with the counterfeit notes sandwiched by genuine bills. Suspects met with the victim in a hotel in the major shopping district of Tsim Sha Tsui before being taking him to finalize the deal at Mong Kok district, which is about a 10-minute drive away. Police have detained three suspects, a woman and two men, on suspicion of obtaining property by deception and possession of counterfeit banknotes. If convicted, they could face sentences ranging from 10 to 14 years in prison. This case bears a striking resemblance to an incident in April 2024 when a victim was