On September 2, the WazirX team, led by co-founder Nischal Shetty, held a virtual townhall with media members. Shetty revealed that users in urgent need of funds have been withdrawing their Indian Rupee balances from the platform. Initially, there was a surge in withdrawals after 66 percent of users’ INR balances were unfrozen on August 26, but the momentum has since slowed down.
Financial Distress
The WazirX platform faced significant financial distress after a multi-signature wallet was hacked, resulting in a loss of over $230 million. This incident led to the suspension of trading, withdrawals, and deposit services, causing further distress to users. Currently, crypto withdrawals are still suspended, and 34 percent of users’ INR funds remain frozen pending investigation.
Recovery Efforts
WazirX has partnered with a financial restructuring firm called Kroll in Singapore to assist in recovering funds and restructuring the company’s capital. However, users may only be able to recover up to 57 percent of their deposits from WazirX. The company has filed for a moratorium in a Singapore court to analyze its liabilities and reorganize its capital, with a restructuring scheme expected to take up to six months.
Shetty mentioned that the WazirX team has been cooperating with relevant authorities to investigate the hack, but details of the ongoing investigations were not disclosed. The team avoided questions regarding its relationship with Binance, calling the information confidential. Binance had claimed to have acquired WazirX in 2019, but disputes arose when former Binance CEO Changpeng Zhao stated that the acquisition was never completed. WazirX accused Binance of spreading false information in the market.
There is no definite timeline for when crypto withdrawals will resume on the WazirX platform, leaving users in uncertainty about the future of their funds. Shetty advised users to withdraw their INR balances from the platform until the financial restructuring efforts are completed. The company is in touch with authorities to find responsible parties for the hack, but the details of these investigations remain undisclosed.
The cryptocurrency exchange WazirX is facing a financial crisis due to a massive hack and subsequent suspension of services. Users are advised to retrieve their funds from the platform, as recovery efforts may take months to finalize. The partnership with Kroll in Singapore aims to assist in restructuring the company’s finances, but the future of WazirX remains uncertain. Authorities are working with the team to investigate the hack, while details regarding the company’s relationship with Binance remain confidential.