India’s Web3 alliance tightens cybersecurity after Wazirx attack

The BWA’s initiatives highlight an increasing awareness of the importance of cybersecurity in preserving trust and integrity in digital finance.

Following the $230 million hack on WazirX, India’s Bharat Web3 Association (BWA) is increasing its focus on strengthening cybersecurity and improving consumer protection within the crypto industry.

According to local media, the BWA, chaired by Dilip Chenoy, has formed two new internal groups specifically to address these issues and investigate the recent security breach.

Consumer protection task forces

One group will focus on cybersecurity, comprising chief information security officers from member firms. This team will develop standard operating procedures and implement solutions designed to prevent future security breaches.

However, the second group will address consumer protection issues, ensuring that guidelines are up-to-date and user interests are safeguarded.

Chenoy stated that a thorough investigation into the breach is underway, with the BWA closely monitoring the situation and maintaining regular communication with the affected parties — WazirX and Liminal — to ensure a complete examination of the incident.

He mentioned that the BWA had requested a thorough forensic analysis, root cause evaluation from both companies and an assessment of potential legal and remedial actions in response to the incident.

Chenoy stated that the BWA suggested a third-party evaluation of the forensic report to ensure a neutral review. This approach would provide an objective analysis of the breach and help ensure that all aspects of the incident were thoroughly investigated.

BWA expands scope to cybersecurity

The executive noted that the BWA has traditionally concentrated on regulatory compliance matters, including registering the Financial Intelligence Unit and implementing Anti-Money Laundering measures. However, the recent incident has highlighted the importance of placing greater focus on cybersecurity.

Related: $235M WazirX exchange hack has implications for India’s crypto industry

The association, which includes major players such as Coinbase, Polygon, CoinSwitch, Liminal, Biconomy, Tax Nodes, Giottus and Hike, will now also involve WazirX’s local rival, CoinDCX in its newly established groups. These teams will review and update existing consumer protection guidelines and tackle the current cybersecurity challenges.

The hack at WazirX, one of India’s largest cryptocurrency exchanges, resulted in a significant loss of approximately $235 million, making it the second-largest hack of a centralized exchange in recent times.

The hack, which affected 45% of user funds could have significant implications for India’s cryptocurrency sector, which has flourished despite government pressure, prompting immediate action from the BWA.

On July 27, the exchange announced a strategy to minimize disruption to its users and maintain the platform’s stability.