As a seasoned crypto investor who has witnessed the rise and fall of numerous digital assets over the years, I find myself closely following the ongoing WazirX saga with a mix of concern and intrigue. Having lost my fair share to hacks and scams in the past, I can’t help but feel a sense of solidarity with CoinSwitch as they take a bold stand against WazirX owners for the return of their funds worth Rs 80 crore.
In a significant turn of events related to the WazirX hack incident, Indian crypto exchange CoinSwitch has chosen to take legal measures against the owners of WazirX to recover approximately 80 crore rupees worth of investments. In a series of impactful tweets on ‘Twitter’, CoinSwitch stated that WazirX’s efforts towards fund recovery have been inadequate, leaving them with no other option but to resort to legal action.
This is the first entity/customer of WazirX who has decided to pursue legal action against the exchange to recover their funds. WazirX owners are under heavy criticism due to their alleged mismanagement post the July 18 cyber hack that resulted in loss of Rs 2000 crores of user funds.
Following a month since the security breach, WazirX has declared that only 66% of INR withdrawals will be possible for users, while their full crypto holdings remain undetermined. This decision has sparked frustration among users, who feel unfairly burdened given the alleged carelessness of management, which they believe led to the hacking of a multi-signature wallet on July 18.
Just seconds after Nischal Shetty, co-founder of WazirX, announced their intent to submit a moratorium request to the Singapore High Court using the Insolvency, Restructuring and Dissolution Act 2018, CoinSwitch made its announcement.
The funds CoinSwitch has on WazirX include Rs 12.4 cr in INR, Rs 28.7 cr in ERC20 tokens, and Rs 39.9 cr in other tokens. This makes up about 2% of all funds of CoinSwitch on WazirX. As per WazirX, on July 18 only ERC20 tokens were impacted by the cyber attack on a multi-custodial wallet.
Nevertheless, CoinSwitch wants to assure its users that their funds remain secure and there’s no reason for alarm.
In response to the hack, CoinSwitch used funds from its reserve to keep an equal balance of users’ cryptocurrency holdings for enhanced security. Furthermore, CoinSwitch intends to disclose its proof of reserves for a second time this year to promote transparency. However, WazirX has yet to reveal such information since the incident occurred. Since 2022, most user transactions on CoinSwitch have been processed through CoinSwitchX, an exchange owned by CoinSwitch, thus minimizing the risk of funds being held outside its system.
“CoinSwitch explained their reason for holding funds on WazirX. As a platform that aggregates exchanges, CoinSwitch keeps a minimal percentage of its assets (7%) on other cryptocurrency platforms to guarantee smooth trading experiences for our users, which we’ve previously disclosed in our Proof of Reserves (July 2023 and May 2024).”
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2024-08-28 14:28