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A significant cyber heist has rocked India's cryptocurrency community, with Bengaluru-based Neblio Technologies reporting a loss of ₹378 crore (approximately $44 million USD). This incident, considered one of Karnataka's largest cyber thefts, has raised serious concerns about the security vulnerabilities within the unregulated Indian cryptocurrency market.
The theft unfolded rapidly. Beginning with an insignificant test transaction of 1 USDT around 2:37 AM, hackers managed to steal a massive sum by 9:40 AM. Company officials suspect that the breach originated from the laptop of Rahul Agarwal, a former part-time employee who is now in police custody.
Investigators are exploring the possibility of insider involvement or a compromised system. The Whitefield Cyber Crime Police are conducting a thorough investigation to trace the stolen cryptocurrency and identify any other potential accomplices.
The incident highlights the significant challenges posed by the lack of regulatory oversight in India's cryptocurrency sector. Experts, such as Kanishk Gaur, a cybersecurity and data privacy expert interviewed by News9, emphasised the difficulty in recovering stolen cryptocurrencies due to the decentralised nature of cryptocurrencies and their use of the dark web.
The absence of a regulatory body akin to the Reserve Bank of India (RBI) for cryptocurrencies leaves investors vulnerable and limits the ability to enforce penalties on companies that fail to meet adequate security standards. Gaur also pointed to the insufficient training of Indian law enforcement agencies in tracing cryptocurrency transactions as an obstacle to successful investigations.
