TLDR:
- On July 18, WazirX fell victim to a significant security breach, suffering financial damages exceeding $230 million.
- The cryptocurrency platform has outlined a recovery strategy, enabling phased INR withdrawals starting from August 26.
- There are claims that external entities are trying to slow down WazirX's recovery strategy.
- Part of WazirX’s strategy includes legal measures being pursued in Singapore.
- Nischal Shetty, the co-founder, refutes allegations about the depletion of remaining assets and cautions about fraudulent profiles disseminating inaccurate information.
WazirX, the renowned Indian cryptocurrency platform, is strategizing solutions to bounce back from a grave security lapse. that occurred on July 18, 2024 The security breach, causing over $230 million in losses, forced a halt on trading and withdrawal activities on the platform.
To address the situation, WazirX has introduced a restructuring blueprint focused on stabilizing their operations and securing user assets.
Phased INR withdrawals are set to recommence on August 26. As per WazirX, the INR dealings managed by Zanmai Labs Pvt Ltd were unaffected by the breach, and enough reserves exist to cover all INR obligations.
However, unresolved disputes and ongoing legal probes have resulted in 34% of the INR reserves being frozen.
During the initial phase, which ends on September 8, users are allowed to withdraw half of the 66% available limit.
From September 9 until September 22, the platform will authorize the withdrawal of the remaining half of the 66% limit, alongside a 60% drop in withdrawal fees to ease financial strain on its users.
Currently, the exchange lacks sufficient cryptocurrency to resume withdrawals. WazirX is investigating various recovery solutions, including bounty programs and legal avenues. Acknowledging that retrieving the stolen assets will require time and resolve.
WazirX’s rebuilding strategy includes pursuing legal proceedings in a Singaporean court, chosen for its legal restructuring process.
Part of their rebuild involves implementing a court-endorsed scheme of arrangements, assisting WazirX in negotiating honest and equitable terms to benefit all stakeholders impacted by the breach.
WazirX has expressed apprehensions about outside parties potentially trying to draw out its recovery process for personal gain.
Through a social media post, WazirX stated that such parties strive to sustain 'doubt' rather than achieve resolution, underscoring that restructuring is the optimal and legally appropriate strategy to the crypto-related quandary.
Greetings, community! We comprehend that pursuing this restructuring path might stir uncertainties, but it's the most efficient and legally sound resolution to tackle our current crypto issues.
We trust that this course of action serves the best interests… pic.twitter.com/1NiLMV88E9
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 24, 2024
Co-founder Nischal Shetty addressed user concerns over remaining assets following the cyber-heist.
He pointed out that miscommunication had stirred unwarranted anxiety by insinuating the remaining assets were lost, stressing such allegations are meritless and aimed at stirring attention.
Shetty plans to publicize WazirX’s Proof of Reserves (PoR) once a new custody provider is secured.
Shetty also advised users to be wary of new fake accounts masquerading as WazirX spreading false information, emphasizing awareness and focusing on constructive resolutions over spreading negativity.
The platform intends to provide further details of its restructuring plans in the upcoming week. Users are reminded this doesn’t equate to a bankruptcy or liquidation process, both drawn-out scenarios.
In light of the WazirX breach, India's Bharat Web3 Association reiterated its commitment to bolstering cybersecurity standards and user protection within the crypto arena.
This incident adds to the existing regulatory challenges facing cryptocurrency exchanges in India, including compliance drawbacks notified by the Financial Intelligence Unit under India’s Finance Ministry in December 2023.
