- CoinSwitch sues WazirX over $9.7 million in assets frozen after $230 million cyberattack.
- WazirX seeks a 30-day moratorium to restructure and address frozen withdrawals.
- WazirX has authorized partial INR withdrawals, but crypto withdrawals remain suspended.
CoinSwitch, a leading cryptocurrency exchange in India, has filed a legal claim against rival exchange WazirX following a July cyberattack that resulted in the theft of roughly $230 million in assets.
The suit comes as WazirX seeks a 30-day moratorium from the High Court of Singapore to carry out restructuring efforts and address user withdrawals, which remain largely frozen.
CoinSwitch moves to recover $9.7 million frozen on WazirX
The July 14 cyberattack on WazirX sent shockwaves through the cryptocurrency community, particularly in India.
The breach resulted in the theft of about $230 million in crypto assets, largely ERC-20 tokens on Ethereum that were held in WazirX’s hot wallets.
Immediately after the attack, WazirX suspended all withdrawals, leaving users unable to access funds and sparking widespread concern and frustration. WazirX, which claims to be India’s largest cryptocurrency exchange, has since authorized phased INR withdrawals, but crypto withdrawals remain suspended indefinitely.
CoinSwitch has stepped in to recover its assets, estimated at about $9.7 million, which are frozen on the WazirX platform. Those funds include 12.4 crore Indian rupees, 28.7 crore rupees worth of ERC-20 tokens, and 39.9 crore rupees in other tokens — roughly 2% of CoinSwitch’s total holdings.
Despite multiple attempts to resolve the matter directly with WazirX, CoinSwitch says the rival exchange has not responded, leaving litigation as the only viable option.
It’s been over a month since WazirX, a major crypto exchange operating in India, claimed that a cyber attack on their platform led to the theft of $230 million (~ Rs 2000 cr) worth of funds.
We have attempted to be in regular touch with WazirX since the day of the incident but…
— CoinSwitch: India’s Simplest Crypto App 🚀 (@CoinSwitch) August 28, 2024
CoinSwitch has also reassured its users that their funds remain secure, stating it has used its own treasury to guarantee a 1:1 coverage for each user’s crypto holdings on its platform.
The company says it plans to publish a proof of reserves for the second time this year to maintain transparency around its holdings.
WazirX seeks court-approved breathing room
In response to the crisis, WazirX filed for a 30-day moratorium with the High Court of Singapore, a request that, if granted, would provide temporary relief from certain financial obligations.
The moratorium, according to Zettai — the parent company that operates WazirX in India — is intended to give the exchange time to implement its restructuring plans.
Those restructuring efforts are designed to address users’ crypto balances and work toward recovery of affected assets. While the moratorium request does not equate to bankruptcy protection, it is a strategic step aimed at avoiding insolvency and ultimately reopening withdrawals.
No hearing date has been set for the moratorium application yet, leaving WazirX’s future uncertain as the platform navigates CoinSwitch’s legal challenge and attempts to rebuild user trust.
The dispute between CoinSwitch and WazirX highlights the fragile nature of the cryptocurrency sector, where platform security and user confidence are crucial.
As events unfold, the outcome of these legal and restructuring efforts will carry significant implications for the broader crypto community in India and beyond.