India’s largest cryptocurrency exchange, WazirX, faces scrutiny following a $235 million hack attributed to North Korea’s Lazarus Group. The Delhi High Court is examining a petition for a Special Investigation Team to probe the incident and platform security. The RBI’s lack of regulation for WazirX drew criticism, highlighting concerns over cryptocurrency’s potential risks to the financial system.
New Delhi: India’s largest cryptocurrency exchange, WazirX, is under scrutiny after a massive $235 million hack last year. Earlier this week, Japan, South Korea, and the United States issued a joint statement blaming North Korea’s Lazarus Group for the breach. Following these allegations, the Delhi High Court has stepped in, seeking responses from the Indian government, Reserve Bank of India (RBI), and other relevant authorities.
The High Court is addressing a petition that calls for the formation of a Special Investigation Team (SIT) to probe alleged cyberattacks on WazirX and examine other operational issues linked to the exchange. The petition raises concerns about the platform’s security measures and its ability to protect users from cyber threats.
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Justice Sachin Datta, presiding over the case, emphasized that WazirX would bear financial responsibility if the breach was found to be due to its own lapses. He stated:
“If someone from the dark web breached your platform, you cannot say sorry… I am curious to know if the government will wash its hands off in its affidavit.”
The judge also highlighted the platform’s accountability, asserting that WazirX cannot evade liability for such a significant breach.
In a concerning revelation, the RBI informed the court that it does not regulate platforms like WazirX, a position Justice Datta criticized as “unfortunate.” He further warned:
“You (RBI) may turn a blind eye to crypto, but it could threaten the financial system of the country. What are you doing to regulate that?”
Justice Datta has also issued notices to the RBI, SEBI, and others in connection with a similar petition concerning the BitBNS cryptocurrency exchange, where users have reported frozen withdrawals and financial irregularities. The plea calls for stricter cryptocurrency regulations and investigations into BitBNS’s operations.
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