WazirX Users Lose Rs 50 Cr in WRX After Binance Delisting

by

As a seasoned analyst with years of experience navigating the turbulent waters of the cryptocurrency market, I find myself deeply concerned about the current state of WazirX and its users. The steep decline in the value of WRX tokens, coupled with the significant losses faced by users following the delisting from Binance, raises serious questions about the management of user funds on the platform.

Due to the ongoing suspension of funds on the WazirX exchange, which affects over a hundred thousand users, the value of their native token, WRX, has plummeted by approximately 90% since it was removed from Binance. This delisting appears to be the cause of potential losses exceeding Rs 50 crore for WazirX users, as the value of WRX has dropped significantly.

WRX tokens made up a portion of the pre-existing funds that WazirX had following the July 18 hack, during which approximately 2000 crore Indian rupees’ worth of cryptocurrencies were taken.

According to the most recent Proof-of-reserve report by CoinGabbar, a total of 21.52 million WRX tokens are in circulation, currently valued at approximately INR 7.64 crore according to current market prices. Prior to its delisting from Binance, these same tokens were worth over INR 50 crore.

Following the announcement about its delisting, the market value of the WRX token has dropped significantly, from $100 million to a mere $7 million according to data from Coinmarketcap. This implies that the worth of all WRX tokens has decreased by approximately 43 crore Indian rupees, and it is the token holders who are likely to experience this loss.

Given that the drop in WRX token value, following its delisting on Binance, was anticipated, it’s worth considering whether the WazirX team might have foreseen this event and taken measures to minimize potential losses.

What is WazirX doing with user funds?

According to their earlier announcement, the WazirX team plans to transfer user funds to cryptocurrency exchanges for trading purposes, aiming to capitalize on recent price surges. At present, as per the Proof of Reserves (PoR), they have approximately $58 million worth of funds on these crypto exchanges and around $190.40 million in assets stored on the blockchain.

This collection encompasses more than 400 different cryptocurrencies, ranging from well-established large-caps such as Bitcoin, Ethereum, and Tron, to lesser-known low-cap or even illiquid tokens. As of December 26th, 2024, the combined value of these assets amounts to approximately $248.35 million.

Initially, the money was moved to platforms such as Binance, ByBit, and HTX with the aim of generating profits for users. However, it appears that the approach is not proving successful. Moreover, the value of the remaining user funds has decreased significantly, dropping almost $50 million from its earlier total of $298.17 million, as reported by WazirX on October 24th.

It seems the question now concerns the plans of the WazirX team regarding user funds, as there’s no effort shown towards recovery nor any announcement for partial withdrawals. Notably, the WazirX team appears to be using these funds to cover legal costs and initiate new projects without obtaining users’ agreement first.

Read More

2024-12-26 16:52