The embattled crypto platform WazirX has found itself in hot water after a $234 million hack in July. As a result, the platform has entered into an initial 30-day moratorium, with a potential extension pending a decision by Singapore’s High Court. This move came after rival platform CoinSwitch announced its intention to take legal action to recover approximately $9.6 million in digital assets trapped on WazirX’s exchange. Zettai Pte, the Singapore-incorporated company behind WazirX’s operations, filed for the moratorium on Aug. 27, triggering an automatic freeze that will give the firm time to come up with a restructuring plan.
WazirX estimates that it will need at least six months to finalize the restructuring plan and collaborate with stakeholders. The company emphasized that the moratorium is necessary to address users’ crypto balances and work toward recovering funds. Under the planned restructuring, the impact of the hack will be distributed among users, who will receive a share of the available token assets based on their account balances. Nischal Shetty, WazirX’s co-founder and CEO, highlighted the importance of unity among stakeholders in determining the timeline for restructuring. He emphasized the need for support and collaboration to move forward effectively.
CoinSwitch, the rival platform to WazirX, revealed that it had significant assets, including fiat currency, ERC20 tokens, and other digital assets, trapped on WazirX’s platform following the hack. Despite multiple attempts to resolve the issue, CoinSwitch has been unable to recover the funds and expressed frustration with WazirX’s lack of clarity regarding a recovery plan. As a result, CoinSwitch announced its decision to pursue legal action to recover the funds. However, the company assured users that the affected funds represent less than 1% of its total assets and is maintaining a 1:1 ratio for user holdings using its treasury reserves.
Despite the looming lawsuit, Shetty remains unwavering in his commitment to treating all users fairly, regardless of the size of their claims. He stressed the importance of transparency and unity among stakeholders in moving forward with the restructuring plan. The outcome of the legal action and the High Court’s decision on the moratorium extension will determine the future of WazirX and its users. As the crypto platform navigates these challenging times, collaboration and support will be key in achieving a successful recovery and rebuilding process.
