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The Indian crypto exchange WazirX's Co-Founder Nischal Shetty announced a prize of $23 million as a part of its “bounty program" for recovering the $234 million assets stolen in the hacker attack, according to a post on the social media platform X on Sunday, July 21. An update on X, the platform stated that "the cyber attack theft has impacted our ability to maintain 1:1 collaterals with assets, and we've temporarily paused trading."

“The total bounty has been updated to $23M thanks @zachxbt for the suggestion," said Nischal Shetty, co-founder of WazirX on the social media platform X. This is the second time the founder has increased the reward amount to regain the stolen assets worth $234 million. It started with WazirX introducing the “bounty program" offering to pay $10,000 worth of USDT “for actionable intelligence that leads to freezing the funds," and also “a 5% incentive of the recovered amount as a white hat reward," according to the post on X.

WazirX's Bounty Program's initial reward move was criticized by netizens for the small reward value. The reward value was then increased to $11.5 million offered for recovering the assets. The co-founder then followed up on his post with another announcement of a prize bump-up clocking in $23 million offered for the recovery of the assets, according to the posts on X.

This comes after the Indian crypto exchange was hit by a security breach during European hours resulting in the loss of funds from one of its wallets on Thursday, July 18. WazirX confirmed the incident and started investigating the outflows, temporarily suspending all withdrawals for the day.

According to mint, the blockchain data tracked by Lookonchain shows that more than $100 million worth of Shiba Inu (SHIB) tokens were withdrawn, followed by Ethereum (ETH) worth $52 million, Matic (MATIC) worth $11 million, Pepe (PEPE) worth $6 million, marking the biggest loss of funds.

Later it was seen through the transactional data that the hacker was selling the stolen cryptos on the Uniswap on-chain exchange. WazirX blacklisted more than 2,431 accounts from October 2022 to March 2023 which were deemed unlawful.


WazirX announces bounty of $23 million to recover lost assets

One of the leading Indian crypto exchanges WazirX lost $234 million in a series of suspicious transactions today due to security breach. WazirX confirmed the security breach and announced the suspension of withdrawals on the exchange temporarily. Cyvers Alert, a Web3 security firm, announced the detection of multiple suspicious transactions involving WazirX’s Safe Multisig wallet on Ethereum. The firm identified that $234.9 million in funds from the wallet were transferred to a new address. 

In an X post by the official exchange, the WazirX responded, “We're aware that one of our multisig wallets has experienced a security breach. Our team is actively investigating the incident. To ensure the safety of your assets, INR and crypto withdrawals will be temporarily paused. Thank you for your patience and understanding. We'll keep you posted with further updates.” 

Multisig wallets are a type of crypto wallet that requires two or more private keys to authenticate and confirm transactions before they are processed.

Similar incidents of security breaches have taken place with CoinStats, a crypto portfolio management platform, experienced a major security breach, as reported by Finance Magnates. This sophisticated hack involved social engineering, tricking an employee into compromising the company's AWS infrastructure, resulting in the theft of $2 million in crypto assets.

Earlier, cybercriminals exploited Orbit Bridge, a service of the cross-chain protocol Orbit Chain, stealing about $82 million in cryptocurrencies. Orbit Chain confirmed the attack occurred on December 31, 2023, and is currently investigating the issue with international law enforcement.


Indian Crypto Exchange WazirX loses $234 million due to security breach

Last year, actor Ranveer Singh channelised his inner ‘Gully Boy’ through one of CoinSwitch Kuber’s #KuchTohBadlega ad films. Through his desi rap, ‘Mar mar ke jeena ka nahi toh dar dar ke jeena ka nahi’, he convinced his gang, who were playing carrom, to invest in cryptocurrency. And, the boys chimed together, ‘Apna time aa gaya bhai’ to Singh’s ‘Ab kya bol reli public?’. This ad film sort of encapsulates the cryptocurrency category in India.

To target the pulse of the youth and to penetrate deeper into the country, crypto brands have been using celebrity power to make noise. From Ranveer Singh, Ayushmann Khurrana, Keerthy Suresh, Dinesh Karthik, to an army of major and micro-influencers have been pushing crypto brands since last year. While this trend was just taking off, the marketing strategies of these brands somewhat crashed.

Last month, the Securities Exchange Board of India (SEBI), wrote a letter to the Parliamentary Standing Committee on Finance to restrict celebrities from endorsing a sector that was volatile in nature. Advertising Standards Council of India (ASCI) stepped in to to assert the fact that celebrities would be held accountable if the ads were found to be misleading. It said ‘Actors had to do their due diligence’. But do they?

The rules of crypto advertising

As per ASCI’s Manisha Kapoor, secretary general and chief executive officer, as of now, there was no law in place that would prohibit them from endorsements on ‘volatile in nature’ subjects. “Since celebrities enjoy a great following and their words carry the potential to influence people, they have to do due diligence to understand a subject they do not have any domain expertise on. Under the law, all endorsers are responsible for the brands and services they promote,” informs Kapoor. To be sure, ASCI doesn’t have legal powers for complaint redressal or removal of ads from the digital platform.

From April 1 this year, ASCI asked all virtual digital assets (VDAs), which are commonly referred to as crypto or non-fungible tokens (NFTs), to add the disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” This needs to be carried in a "prominent and unmissable" way in campaigns for products and services.

According to Kapoor, disclaimers must be crafted in a manner that would be unmissed by the consumers. No small type and font, practically illegible writing. The guidelines mention how the disclaimer needs to be featured in ads that are online, in print, on television, in audio or in social media posts.

She explains, “The disclaimer also needs to be made in the dominant language of the advertisement. If these are not followed, the celebrity is not aware of the guidelines, and if the ad is found to be misleading, they are liable to be prosecuted as per the Consumer Protection Act 2019. This involves monetary penalties and suspension from endorsing products as well.”

Addressing the big P of marketing – Product

Harish Bijoor, brand guru and founder of Harish Bijoor Consults Inc., thinks that crypto products, and not its ‘advertising’ needed to raise their voice. “New brands will need to depend on direct contact programs, either through Whatsapp advertising or through various other digital means,” he says.

Crypto brands are already changing up their marketing. For instance, CoinSwitchKuber, collaborated with financial influencers like Rachana Ranade, Pranjal Kamra and Sharan Hegde, purely for educational content. The brand’s chief business officer, Sharan Nair, says this is critical to help consumers make informed investment decisions. In case of influencers, ASCI has asked to add the “Paid Partnership” tag while creating branded content, so that there is no ambiguity.

Brands like CoinDCX, WazirX, and ZebPay are also focusing on content marketing at the moment.

Bijoor states that due to interventions from the regulator, some categories would progressively become no-touch categories for brand endorsers. “And, the cryptocurrency category is one such,” he mentions. With the guidelines on cryptocurrency and its respective endorsements in place, it’s time to see how the sector would fare if celeb endorsements cease to exist.”

Codes over strategies

Kapoor stressed that marketers should be familiar with the ASCI code. For them to be more confident in their ads, they must seek advice on the advertising script before it is rolled out for production. She put forth that adherence to the ASCI guidelines would ensure a degree of protection to consumers, as they laid down certain dos and don'ts clearly. Kapoor says, “No advertisement may show that understanding VDA products is so easy that consumers do not have to think twice about investing in it. Nothing in the ad should downplay the risks associated with the category."

Information contained in advertisements shall not contradict the information or warnings that the regulated entities provide to customers. Advertisements that provide information on the cost or profitability of VDA products shall contain clear, accurate, sufficient and updated information, she states.

“For example, ‘zero cost’ will need to include all costs that the consumer might reasonably associate with the offer or transaction. Information on past performance shall not be provided in any partial or biased manner. Returns for periods of less than 12 months shall not be included,” ASCI’s CEO explains to Storyboard18.

There is still a lot of scope for the crypto brands to market themselves. Responsible marketing over mass marketing should be at the core of strategies. As the category evolves, innovation in advertising will be critical. For now, smart marketing is on charts for crypto brands to explore and expand.

CRYPTOCURRENCY