On Monday, September 2, the WazirX team, including co-founder Nischal Shetty, held a virtual media event. During the event, Shetty informed Gadgets360 that users in urgent need of funds had started withdrawing their Indian rupee (INR) balances from the platform. Initially, after 66 percent of users’ INR balances were unfrozen on August 26, there was an increase in withdrawals. However, this momentum has since slowed down. Despite this, the WazirX team is advising users to get their INR balances back from the platform while the financial restructuring is underway.
On July 18, a multi-signature wallet belonging to WazirX, which was under the supervision of Liminal Custody, was subject to a massive hack, resulting in the loss of over $230 million (around Rs 1,900 crore). The incident caused significant financial distress for WazirX users, exacerbated by the exchange’s decision to suspend trading, withdrawals, and escrow services. Currently, cryptocurrency withdrawals on the platform remain suspended, and 34 percent of user funds in Indian rupees remain frozen pending the outcome of the investigation.
Speaking to Gadgets 360, Shetty said, “People have been asking us whether I should cash out or keep it. We are recommending everyone you know to cash out and when we reactivate it, you can always deposit it again.”
Meanwhile, in Singapore, Zettai has partnered with restructuring firm Kroll to help WazirX get its books in order. Speaking to media, Kroll CEO George Gwee said users may not be able to recover about 43 percent of the funds they had on WazirX. Describing the best-case scenario for recovering the funds, Gwee said users could recover up to 57 percent of their WazirX deposits.
Last week, WazirX filed for a mortar board in a Singapore court — essentially buying time to analyze its liabilities and reorganize its capital. It could take up to six months for the restructuring plan to be finalized by the exchange.
At present, the company has not provided an exact date for the resumption of cryptocurrency withdrawals on the platform.
Shetty told Gadgets360 that the WazirX team is in constant touch with the relevant authorities to investigate the attack.
“I can’t go into detail, you know, who we’re talking to, what’s going on. Having said that, I would say we’ve been, you know, cooperative, and there’s been a lot of activity in terms of helping find the person responsible for this attack, and the authorities are helping in any way they can to figure that out,” he noted.
It’s worth noting that the WazirX team has dodged any questions regarding its relationship with Binance, calling the details “confidential.” Binance claimed in November 2019 that it had acquired WazirX. However, last year, former Binance CEO Changpeng Zhao claimed that the WazirX acquisition deal “was never completed.” At the time, WazirX accused Binance of spreading false and misleading information about it to the market.
