#FactCheck - "Deep fake video falsely circulated as of a Syrian prisoner who saw sunlight for the first time in 13 years”

Overview:

WazirX is the platform for cryptocurrencies, based in India that has been hacked, and it made a loss of more than $230 million in cryptocurrency. This case concerned an unauthorized transaction with a multisignature or multisig, wallet controlled through Liminal’a digital asset management platform. These attacking incidents have thereafter raised more questions on the security of the Cryptocurrency exchanges and efficiency of the existing policies and laws.

Wallet Configuration and Security Measures

This wallet was breached and had a multisig setting meaning that more than one signature was needed to authorize a transaction. Specifically, it had six signatories: five are funded by WazirX and one is funded by Liminal. Every transaction needed the approval of at least three signatories of WazirX, all of whom had addressed security concerns by using Ledger’s hardware wallets; while the Liminal, too, had a signatory, for approval.

To further increase the level of security of the transactions, a whitelisting policy was introduced, only limited addresses were authorized to receive funds. This system was rather vulnerable, and the attackers managed to grasp the discrepancy between the information available through Liminal’s interface and the content of the transaction to seize unauthorized control over the wallet and implement the theft.

Modus Operandi: Attack Mechanics

The cyber attack appears to have been carefully carried out, with preliminary investigations suggesting the following tactics: 

• Payload Manipulation: The attackers apparently substituted the transaction’s payload during signing; hence, they can reroute the collected funds into an unrelated wallet. 

• Chain Hopping: To make it much harder to track their movements, the attackers split large amounts of money across multiple blockchains and broke tens of thousands of dollars into thousands of transactions involving different cryptocurrencies. This technique makes it difficult to trace people and things. 

• Zero Balance Transactions: There were also some instances where it ended up with no Ethereum (ETH) in the balance and such wallets also in use for the purpose of further anonymization of the transactions.

• Analysis of the blockchain data suggested the enemy might have been making the preparations for this attack for several days prior to their attack and involved a high amount of planning. 

Actions taken by WazirX:

Following the attack, WazirX implemented a series of immediate actions:

• User Notifications: The users were immediately notified of the occurrence of the breach and the possible risk it posed to them. 

• Law Enforcement Engagement: The matters were reported to the National Cyber Crime Reporting Portal and specific authorities of which the Financial Intelligence Unit (FIU) and the Computer Emergency Response Team (CERT-In). 

• Service Suspension: WazirX had suspended all its trading operations and user deposits’ and withdrawals’ to minimize further cases and investigate. 

• Global Outreach: The exchange contacted more than 500 cryptocurrency exchanges and requested to blacklist the wallet’s addresses linked to the theft. 

• Bounty Program: A bounty program was announced to encourage people to share information that can enable the authorities to retrieve the stolen money. A maximum of 23 million dollars was placed on the bounty. 

Further  Investigations 

WazirX stated that it has contracted the services of cybersecurity professionals to help in the prosecution process of identifying and compensating for the losses. The exchange is still investigating the forensic data and working with the police for tracking the stolen assets. Nevertheless, the prospects of full recovery may be quite questionable primarily because of complexity of the attack and the methods used by the attackers. 

Precautionary measures: 

 The WazirX cyber attack clearly implies that there is the necessity to improve the security and the regulation of the cryptocurrency industry. As exchanges become increasingly targeted by hackers, there is a pressing need for: 

• Stricter Security Protocols: The commitment to technical innovations, such as integration of MFA, as well as constant monitoring of the users’ wallets’ activities. 

• Regulatory Oversight: Formalization of the laws that require proper security for the cryptocurrency exchange platforms to safeguard their users as well as their investments. 

• Community Awareness: To bypass such predicaments, there is a need to study on emergent techniques in spreading awareness, particularly in cases of scams or phishing attempts that are likely to follow such breaches. 

Conclusion:

The cyber attack on WazirX in the field of cryptocurrency market, shows weaknesses and provides valuable lessons for enhancing the security.  This attack highlights critical vulnerabilities in cryptocurrency exchanges, even though employing advanced security measures like multisignature wallets and whitelisting policies. The attack's complexity, involving payload manipulation, chain hopping, and zero balance transactions, underscores the attackers' meticulous planning and the challenges in tracing stolen assets. This case brings a strong message regarding the necessity of solid security measures, and constant attention to security in the rapidly growing world of digital assets. Furthermore, the incident highlights the importance of community awareness and education on emerging threats like scams and phishing attempts, which usually follow such breaches. By fostering a culture of vigilance and knowledge, the cryptocurrency community can better defend against future attacks.

Reference:

https://wazirx.com/blog/important-update-cyber-attack-incident-and-measures-to-protect-your-assets/

https://www.moneycontrol.com/news/opinion/the-230-million-crypto-theft-at-wazirx-is-a-wake-up-call-for-indian-regulators-government-12772563.html

https://www.linkedin.com/pulse/wazirx-cyberattack-in-depth-analysis-jyqxf

‍

A report by MarketsandMarkets in 2024 showed that the global AI market size is estimated to grow from USD 214.6 billion in 2024 to USD 1,339.1 billion in 2030, at a CAGR of 35.7%. AI has become an enabler of productivity and innovation. A Forbes Advisor survey conducted in 2023 reported that 56% of businesses use AI to optimise their operations and drive efficiency. Further, 51% use AI for cybersecurity and fraud management, 47% employ AI-powered digital assistants to enhance productivity and 46% use AI to manage customer relationships.

AI has revolutionised business functions. According to a Forbes survey, 40% of businesses rely on AI for inventory management, 35% harness AI for content production and optimisation and 33% deploy AI-driven product recommendation systems for enhanced customer engagement.  This blog addresses the opportunities and challenges posed by integrating AI into operational efficiency.

Artificial Intelligence and its resultant Operational Efficiency

AI has exemplary optimisation or efficiency capabilities and is widely used to do repetitive tasks. These tasks include payroll processing, data entry, inventory management, patient registration, invoicing, claims processing, and others. AI use has been incorporated into such tasks as it can uncover complex patterns using NLP, machine learning, and deep learning beyond human capabilities. It has also shown promise in improving the decision-making process for businesses in time-critical, high-pressure situations. 

AI-driven efficiency is visible in industries such as the manufacturing industry for predictive maintenance, in the healthcare industry for streamlining diagnostics and in logistics for route optimisation. Some of the most common real-world examples of AI increasing operational efficiency are self-driving cars (Tesla), facial recognition (Apple Face ID), language translation (Google Translate), and medical diagnosis (IBM Watson Health)

Harnessing AI has advantages as it helps optimise the supply chain, extend product life cycles, and ultimately conserve resources and cut operational costs. 

Policy Implications for AI Deployment 

Some of the policy implications for development for AI deployment are as follows:

1. Develop clear and adaptable regulatory frameworks for the ongoing and future developments in AI. The frameworks need to ensure that innovation is not hindered while managing the potential risks. 
2. As AI systems rely on high-quality data that is accessible and interoperable to function effectively and without proper data governance, these systems may produce results that are biased, inaccurate and unreliable. Therefore, it is necessary to ensure data privacy as it is essential to maintain trust and prevent harm to individuals and organisations.
3. Policy developers need to focus on creating policies that upskill the workforce which complements AI development and therefore job displacement. 
4. To ensure cross-border applicability and efficiency of standardising AI policies, the policy-makers need to ensure that international cooperation is achieved when developing the policies.

Addressing Challenges and Risks 

Some of the main challenges that emerge with the development of AI are algorithmic bias, cybersecurity threats and the dependence on exclusive AI solutions or where the company retains exclusive control over the source codes. Some policy approaches that can be taken to mitigate these challenges are:

1. Having a robust accountability mechanism. 
2. Establishing identity and access management policies that have technical controls like authentication and authorisation mechanisms. 
3. Ensure that the learning data that AI systems use follows ethical considerations such as data privacy, fairness in decision-making, transparency, and the interpretability of AI models.

Conclusion 

AI can contribute and provide opportunities to drive operational efficiency in businesses. It can be an optimiser for productivity and costs and foster innovation for different industries. But this power of AI comes with its own considerations and therefore, it must be balanced with proactive policies that address the challenges that emerge such as the need for data governance, algorithmic bias and risks associated with cybersecurity. A solution to overcome these challenges is establishing an adaptable regulatory framework, fostering workforce upskilling and promoting international collaborations. As businesses integrate AI into core functions, it becomes necessary to leverage its potential while safeguarding fairness, transparency, and trust. AI is not just an efficiency tool, it has become a stimulant for organisations operating in a rapidly evolving digital world.

References

• https://indianexpress.com/article/technology/artificial-intelligence/ai-indian-businesses-long-term-gain-operational-efficiency-9717072/ 
• https://www.marketsandmarkets.com/Market-Reports/artificial-intelligence-market-74851580.html
• https://www.forbes.com/councils/forbestechcouncil/2024/08/06/smart-automation-ais-impact-on-operational-efficiency/ 
• https://www.processexcellencenetwork.com/ai/articles/ai-operational-excellence 
• https://www.leewayhertz.com/ai-for-operational-efficiency/ 
• https://www.forbes.com/councils/forbestechcouncil/2024/11/04/bringing-ai-to-the-enterprise-challenges-and-considerations/  

‍

Incident Overview

Earlier this week, the Chinese media reported that several ‘Macau’ government websites were hacked, indicating a significant targeted cyberattack. The hacked website includes those of the office of the Secretary for Security, the public security police, the fire services department and the Security Forces Services Bureau. It was reported that the police have launched a criminal investigation to trace the source of the crime. Furthermore, officials believe the source of the intrusion was likely from overseas, and authorities have carried out an emergency response in conjunction with telecommunication operators to restore affected services on a priority basis. The densely populated Macau is a special administrative region on the south coast of China and the cyber attacks on the essential government website of China raise a serious concern. 

Response and Mitigation

Macau's authorities carried out an emergency response in collaboration with telecommunication operators to restore regular services as a distributed denial-of-service attack (DDoS) was reported to be carried out on certain government websites which resulted in the inactivity of those several websites. The country's security forces instructed Macau Telecom to investigate the incident and submit a report and improvement plan to prevent similar attacks in the future.

Context and Implications

The hack on the government websites of Macau is not a single incident; rather, it is a part of an increasing pattern of cyberattacks on the region's vital infrastructure. According to a recent report, the frequency of cybercrimes has tripled since 2020, targeting Macau's critical infrastructure, which is worrying. This pattern draws attention to the growing threats that public sector organisations and governments throughout the world confront.

Final Words 

In light of such sophisticated attacks targeting vital infrastructure or critical government operations, it is imperative that the country ensure powerful cybersecurity strategies and measures. Implementing robust cybersecurity measures, developing incident response planning, regular security checks, employee training on cyber hygiene, public awareness and capacity building and international collaboration to jointly develop and plan counteract strategies is a crucial step to build safeguards against such cyber threats.

The incident of a cyberattack on the government websites of Macau serves stark reminder of the evolving threats and cybersecurity challenges, it is a serious concern when critical government websites are compromised by malicious actors. It highlights the necessity for continuous vigilance and cybersecurity measures in place to counter such cyber attacks. A comprehensive approach to cybersecurity, the government can enhance their overall cybersecurity posture, establish resilience against such threats in future, and save the functionality of essential government websites. 

References:

1. https://macaudailytimes.com.mo/websites-of-office-of-the-secretary-for-security-targeted-in-a-cyber-attack.html
2. https://www.reuters.com/world/china/several-macau-government-websites-hacked-says-chinese-state-media-2024-07-11/
3. https://4imag.com/several-macau-government-websites-hacked-says-chinese-state-media/
4. https://www.aol.com/news/several-macau-government-websites-hacked-001435511.htmlhttps://therecord.media/macau-government-websites-hit-with-cyberattack
5. https://macaonews.org/news/city/macau-cyberattacks-cyber-security-attacks-macao/

‍