COURTKUTCHERY SPECIAL ON ANTI-HACKING LAWS
Trust Wallet Chrome Extension Hack Exposes Global Crypto Risks: India’s Anti-Hacking Laws in Focus
Users lose millions as hackers exploit browser extension vulnerabilities
Indian cyber law framework under IT Act 2000 offers remedies but needs stronger enforcement
By Our Legal Reporter
New Delhi: December 29, 2025:
On December 25, 2025, a major security breach hit the Trust Wallet Chrome extension, a popular non-custodial crypto wallet owned by Binance. Hackers exploited vulnerabilities in version 2.68 of the extension, draining over $7 million (₹58 crore) worth of cryptocurrencies including Bitcoin, Ethereum, Solana, and Binance Coin.
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The incident, flagged by blockchain investigator ZachXBT, revealed how attackers inserted malicious code into the extension update, allowing them to siphon funds from unsuspecting users. Trust Wallet confirmed that 2,596 wallets were compromised, with over 5,000 compensation claims filed.
Challenges Faced by Users Due to Hacking
The breach highlights several challenges for crypto users:
- Financial loss: Victims lost life savings, with some reporting losses of over $300,000 within minutes.
- Trust deficit: Hacks erode confidence in crypto platforms, discouraging adoption.
- Technical complexity: Many users lack the expertise to detect malicious updates or secure wallets.
- Delayed compensation: Though Binance pledged refunds, reimbursement processes remain complicated.
- Psychological impact: Sudden losses create stress, anxiety, and distrust in digital finance.
Indian Connections
India has a growing crypto user base, with millions using wallets like Trust Wallet. Reports suggest that Indian users were among those affected, given the extension’s global reach.
The incident resonates strongly in India because:
- Crypto adoption is rising: Despite regulatory uncertainty, India ranks among the top countries in crypto ownership.
- Cybercrime surge: India has seen a sharp rise in crypto-related frauds, phishing, and hacking.
- Policy debates: The hack strengthens calls for a comprehensive crypto regulation and stronger cybersecurity laws.
Anti-Hacking Laws in India
India’s legal framework against hacking is primarily governed by the Information Technology Act, 2000 (IT Act):
- Section 43: Imposes liability for unauthorized access, downloading, or damage to computer systems.
- Section 66: Defines hacking as unauthorized access with intent to cause damage, punishable with up to 3 years imprisonment or ₹5 lakh fine.
- Section 66F: Covers cyber terrorism, with penalties up to life imprisonment.
- Section 72: Penalizes breach of confidentiality and privacy.
- Indian Penal Code (IPC): Sections 420 (cheating) and 406 (criminal breach of trust) are often applied in cyber fraud cases.
While these provisions exist, enforcement remains weak due to jurisdictional challenges and lack of specialized cybercrime units.
Case Title and Context
- Case Title: Trust Wallet Chrome Extension Breach (2025)
- Jurisdiction: Global, with Indian users among victims.
- Nature of Case: Cyber fraud, unauthorized access, theft of digital assets.
- Legal Relevance in India: Covered under IT Act Sections 43, 66, and 66F.
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Expert Opinions
Cybersecurity experts emphasize:
- Need for awareness: Users must update extensions promptly and avoid suspicious links.
- Global cooperation: Hacks often cross borders, requiring international collaboration.
- Indian reforms: Experts call for amendments to IT Act to address crypto-specific crimes.
Comparison of Global vs Indian Framework
|
Aspect |
Global (US/EU) |
India |
|
Crypto regulation |
Clearer frameworks, SEC oversight |
Regulatory uncertainty, RBI cautious |
|
Anti-hacking laws |
Specialized cybercrime laws |
IT Act 2000, limited scope |
|
Enforcement |
Stronger cybercrime units |
Limited resources, jurisdictional issues |
|
Compensation |
Insurance, legal remedies |
Victims rely on company refunds |
Broader Implications
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The hack has wider implications:
- For users: Reinforces need for vigilance in digital finance.
- For India: Highlights gaps in cyber law enforcement and crypto regulation.
- For regulators: Pushes IRDAI, RBI, and SEBI to consider consumer protection in digital assets.
- For businesses: Necessitates stronger cybersecurity audits and transparency.
Conclusion
The Trust Wallet Chrome extension hack is a wake-up call for crypto users worldwide, including India. It underscores the vulnerabilities of digital finance and the urgent need for stronger cybersecurity frameworks.
India’s IT Act 2000 provides a legal basis to tackle hacking, but enforcement must be strengthened, and crypto-specific laws introduced. For users, the lesson is clear: vigilance, awareness, and secure practices are the best defence against cyber threats.
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