Following the virtual townhall held by the WazirX team on September 2, co-founder Nischal Shetty disclosed to Gadgets360 that users are currently withdrawing their Indian Rupee (INR) balances from the platform. The initial surge in withdrawals occurred after 66 percent of users’ INR balances were unfrozen on August 26. However, the pace of withdrawals has now slowed down despite financial restructuring efforts being carried out by the WazirX team. Users are strongly advised to retrieve their INR balances from the platform as the investigation into the recent hack continues.
On July 18, a multi-signature wallet associated with WazirX, under the supervision of Liminal Custody, was targeted in a massive hack, resulting in a staggering loss of over $230 million. This incident triggered financial turmoil for WazirX users, which was further exacerbated by the exchange’s decision to halt trading, withdrawals, and deposits. Presently, cryptocurrency withdrawals on the platform remain suspended, and 34 percent of users’ INR funds are still frozen pending the completion of the probe.
WazirX has partnered with Kroll, a financial restructuring firm in Singapore, to restore its financial stability. Kroll’s director, George Gwee, stated that users may only be able to recover around 43 percent of their lost funds. In the best-case scenario, users could potentially retrieve up to 57 percent of their WazirX deposits. The exchange has filed for a mortarium in a Singapore court, seeking time to assess its liabilities and reorganize its capital. It may take up to six months to finalize a restructuring plan.
Shetty revealed that the WazirX team is in constant communication with relevant authorities to investigate the hack. While details of the ongoing discussion were not disclosed, Shetty mentioned that they have been cooperative with the authorities in identifying the perpetrators. However, the team avoided addressing questions regarding its association with Binance, deeming such information confidential. Binance had previously announced its acquisition of WazirX in 2019, which was later disputed by former CEO Changpeng Zhao.
The aftermath of the WazirX hack has left users in a state of financial uncertainty. With ongoing withdrawal advisories and collaboration with financial restructuring firms, the exchange aims to navigate through this challenging period. However, the long-term impact of the hack on users’ funds and the exchange’s reputation remains to be seen.
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