Staring at Imminent Collapse, WazirX Owner Floats Conspiracy Theories

As a seasoned analyst with years of experience in the financial industry, I find myself deeply concerned about the ongoing saga at WazirX. The co-founder Nischal Shetty’s recent actions and accusations seem to be more focused on shifting blame than finding genuine solutions for the affected users. The fact that the exchange has moved its base of operations but continues to serve a predominantly Indian userbase raises serious questions about accountability and transparency.

Since the significant cryptocurrency exchange WazirX experienced a hack resulting in losses estimated at approximately INR 2000 crores, its co-founder, Nischal Shetty, has been exploring alternative methods to deflect responsibility for the mishandling that followed the cyber attack.

For the last several days, Shetty has been actively blocking individuals on the platform previously known as Twitter who have voiced criticism about WazirX’s approach to recovering user funds. He justifies this action by claiming that there is a plot aimed at disrupting the recovery and reimbursement process of the exchange.

1. Apart from his other statements, he alleged that individuals without a personal stake in the matter are attempting to interfere with the process using fabricated tales and narratives. The WazirX exchange halted all withdrawals starting July 18 after one of their multi-signature wallets was hacked, resulting in the theft of 45% of users’ funds.

Over the past month, numerous WazirX users have been voicing their concerns, urging for an immediate disbursement of their funds. At present, WazirX has only permitted partial withdrawals of Indian Rupee (INR) funds in two stages, and there is no imminent plan to release 100% of the crypto assets belonging to customers.

The question to answer is whether we want to bring about a prompt resolution or we want to keep fighting and drag this matter for several years.

Those with no skin in the game will spew hate and want you to derail the prompt process to solving this that we are putting together.…

— Nischal (Shardeum) 🔼 (@NischalShetty) August 25, 2024

Nischal Shetty, co-founder of WazirX, has accused several crypto influencers and media outlets of attempting to generate interest from the ongoing dispute between users and management at WazirX. Notably, The Crypto Times has been vocal in advocating for affected WazirX users, leading to our X handle being blocked by Shetty on Saturday. The team at The Crypto Times views this action as a mark of esteem and a demonstration of our dedication to our readers.

Following the decision to restrict several cryptocurrency influencers and news outlets on ‘X’, Shetty announced that his exchange is moving towards facilitating private discussions within the WazirX community, as opposed to open forums on social media sites where all voices can be heard freely.

“Shetty stated on ‘X’ that in addition to advocating for the proposed solutions, it appears some false accounts are impersonating WazirX users. These fake accounts claim they are associated with WazirX when they are not. Their intent is to muffle the voices of those who recognize the benefits of this approach and believe that without it, there may be prolonged delays for several years ahead.”

Whose Skin in the Game is Really?

Through a sequence of posts on Twitter, Shetty claimed that individuals with no stake in the matter are actively advocating for users of WazirX who are requesting access to their frozen funds. It’s important to mention that Nischal Shetty and Siddharth Menon, the co-founders of WazirX, relocated from Mumbai to Dubai in 2023. The company behind exchange WazirX, Zanmai Private Labs, is based in Singapore and oversees its operations.

According to the dispute resolution policy outlined by WazirX, users may seek help from the Singapore International Arbitration Centre if an issue arises, but only after a 60-day period has passed. However, WazirX is currently pursuing legal action in Singapore to resolve the issue of lost cryptocurrency funds for thousands of its Indian users. Interestingly, despite the fact that nearly all of its users are based in India, WazirX does not have a physical presence in the country. This situation underscores the fact that it is primarily the users of WazirX who stand to be impacted by any decisions made!

Here’s a list of people WazirX and Shetty have blamed after Hack

Hackers

Following the cyberattack on July 18, I, as a researcher, reported that WazirX attributed the breach of their multi-signature wallet and the theft of approximately $230 million in cryptocurrencies to an unidentified hacking group. This incident accounted for about 45% of the exchange’s user funds. In response, WazirX has launched a bounty program in an attempt to apprehend these cybercriminals. However, there are speculations that the notorious North Korean hackers known as ‘Lazarus’ could be behind this attack. Yet, it’s essential to keep an open mind and consider the possibility of an inside job as well, as such allegations remain unconfirmed at present.

Liminal Custody

As a researcher looking into the recent incident, I can share that the security partner of WazirX, Liminal Custody, held one of the keys for WazirX’s multi-signature wallet, which was compromised on July 18. WazirX has placed blame on Liminal Custody, stating that a forensic audit on their laptops did not reveal any breach incident. However, Liminal Custody denies these accusations and proposes an impartial, third-party investigation into their user interface and devices to uncover the precise cause of the breach.

Crypto Influencers and Users of WazirX

As a researcher delving into the cryptocurrency sphere, I’ve been intrigued by a series of unusual tweets posted by Nischal. In these tweets, he posed questions to well-known crypto influencers and WazirX users, inquiring why they didn’t alert him earlier about the potential dangers of keeping 45% of user funds in a single wallet. Nischal asserted that, despite WazirX publicly sharing its proof of reserve report for over a year, no one reached out to inform him about the potential issues associated with storing such substantial amounts in a solitary wallet.

It’s worth mentioning that a three-year-old video of Nischal appearing on a podcast has become popular. In the clip, he is heard scolding the host for trying to offer him advice. He emphasizes that he doesn’t require advice but willingly accepts feedback from his community instead.

Media

Nischal recently criticized media outlets, well-known YouTubers, and platforms like Youtube and X, for amplifying the voices of WazirX users who are urgently seeking the return of their frozen funds. Previously reported by The Crypto Times, numerous users have been pushed to severe financial hardship due to these funds being on hold within the exchange. Some have even expressed thoughts of suicide if their issues aren’t addressed.

Conclusion: What Now for WazirX Users?

According to the withdrawal policy outlined by WazirX, users are currently allowed to take out 66% of their INR (Indian Rupee) balances, with no specific timeframe set for the remaining 34% INR or any crypto funds. This approach, reminiscent of a socialist system, has been met with disapproval from users who are now considering legal action against WazirX’s management. The ongoing dispute over the hack that occurred on July 18 has escalated into a heated situation, as users grow increasingly frustrated with WazirX for shifting blame rather than taking responsibility, while they continue to wait for their frozen funds to be returned.

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2024-08-25 18:45