Liminal Responds to WazirX Wallet Controversy and Hack

Liminal Custody has issued a detailed response to the ongoing controversy surrounding WazirX’s submission of 240,000 wallet addresses to the Singapore court, clarifying their role and addressing misconceptions.

Earlier, the Crypto Times reported that WazirX co-founder Nischal Shetty had difficulty finding a custody provider for its remaining funds, including over 240,000 hot and cold wallets, after the ₹2000 crore hack. 

In a statement released on October 22, Liminal stressed that a small number of cold and warm wallets run by Liminal’s infrastructure were involved, even though the majority of the addresses on the list are hot wallets. After the hack, these wallets held about $300 million for a few days and about $177 million for a few months.

Liminal explained that its role with WazirX was to supply warm and cold wallets via its self-custody platform. WazirX might have helped keep the cold wallet signatures hidden by utilizing Liminal’s smart refill and hot wallet features.

After the breach, WazirX blamed Liminal and said they ended their contract in August 2024. However, WazirX kept using Liminal’s platform to manage user funds.

Even 75 days later, WazirX still had over $175 million on Liminal, and about $50 million remains today. Liminal explained they can’t move WazirX’s funds, only WazirX can, and they’ve offered support to help them withdraw the assets.

The statement compared the WazirX breach to the Radiant Capital hack, noting both involved multi-sig wallets and hardware breaches. Liminal praised Radiant Capital for its transparency while criticizing WazirX for blaming Liminal and not providing a detailed post-mortem report.

Liminal criticized WazirX for lacking transparency and accountability, saying their misinformation has harmed industry trust. It emphasized its commitment to transparency and factual communication.

Liminal vowed to defend the Web3 ecosystem by countering false narratives with facts. They urged the community to trust verified sources, emphasizing that transparency and trust are key to the cryptocurrency industry.