WazirX, a crypto platform, recently faced a significant setback after a $234 million hack in July. In response to this, the platform has entered into an initial 30-day moratorium, awaiting a decision from Singapore’s High Court on whether to grant an extension. This decision was prompted by a filing from Zettai Pte, the Singapore-incorporated company behind WazirX’s operations, on August 27. The moratorium provides the firm with the opportunity to draft a restructuring plan to address the hack’s impact on users and work towards recovering funds.
Amidst WazirX’s troubles, rival platform CoinSwitch announced its intention to pursue legal action to recover approximately $9.6 million in digital assets trapped on WazirX’s exchange. Despite multiple attempts to resolve the issue, CoinSwitch expressed frustration over WazirX’s lack of clarity regarding a full recovery plan. As a result, the company felt compelled to take legal action to reclaim the funds. However, CoinSwitch assured its users that the affected funds represent less than 1% of its total assets, and it is maintaining a 1:1 ratio for user holdings using its treasury reserves.
WazirX’s co-founder and CEO, Nischal Shetty, highlighted the importance of collaboration and unity in the restructuring process following the hack. He emphasized the need for stakeholders to come together and agree on a path forward to expedite the timeline for recovery. Shetty acknowledged that the restructuring timeline hinges on the speed at which the firm and its creditors can reach a consensus. Despite the looming potential lawsuit from CoinSwitch, Shetty remains confident that all users will be treated fairly, irrespective of the size of their claims.
The $234 million hack on WazirX has triggered significant legal and operational challenges for the platform. The moratorium and impending legal action by CoinSwitch underscore the complexities involved in recovering funds and addressing the aftermath of a cyberattack. Moving forward, collaboration, transparency, and swift decision-making will be pivotal in navigating the path to recovery for WazirX and its stakeholders.
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