In July, WazirX, one of India’s leading cryptocurrency exchanges, found itself grappling with the aftermath of a staggering $230 million hack. This incident sent shockwaves through the crypto community, leaving users worried about the safety of their investments and prompting the exchange to seek immediate solutions. In a desperate attempt to stabilize its operations, WazirX applied for a six-month moratorium to address the critical situation. However, a Singapore court, in a ruling that reflects the gravity of the circumstances, granted only four months of relief, imposing strict conditions for oversight.
The court’s decision comes with several conditions that WazirX must meet to navigate the aftermath of the hack successfully. One of the most significant requirements is that the exchange must disclose the addresses of its wallets in an official affidavit. This level of scrutiny is designed to enhance transparency and assure users that their funds are being managed appropriately. Additionally, WazirX has six weeks to answer users’ questions and is expected to provide a full account of its financial records. Perhaps most critically, any decision-making regarding its future operations must occur on an independent platform, ensuring that the interests of creditors and users are prioritized. Co-founder Nischal Shetty remains optimistic, characterizing the court’s ruling as a chance for the company to pivot towards resolution and recovery.
WazirX’s parent company, Zettai—which is based in Singapore—has proactively filed for restructuring, marking a pivotal step in the recovery process. This legal maneuver is designed to create a protective buffer against ongoing legal challenges, allowing the firm space to reorganize its operations and set a clear path forward. Shetty believes that this quick filing showcases the exchange’s commitment to finding a solution that will benefit its creditors, emphasizing a legally binding process that respects their rights.
Furthermore, WazirX’s court affidavit indicates that the company is actively pursuing partnerships, currently engaging in discussions with 11 other exchanges and having signed non-disclosure agreements with three. The hope is to secure a partner who can inject the necessary capital to revive the troubled exchange. However, challenges remain; WazirX has indicated that users may not recover all their assets, a tough reality for many affected by the hack.
While WazirX has begun to ease withdrawal restrictions by allowing users to retrieve up to 66% of their Indian Rupee (INR) balances, the situation remains precarious. There are still significant restrictions on cryptocurrency token withdrawals due to inadequate reserves. The exchange’s blame has partly fallen on its wallet service provider, Liminal Custody, which reportedly played a role in the initial breach, although Liminal has denied these claims following an independent review.
As the situation unfolds, WazirX has employed various recovery tactics, including a bounty program aimed at regaining lost assets. Meanwhile, the hacker remains active, reportedly nearing the end of laundering the stolen funds, with only around $6 million in Ethereum (ETH) remaining in their possession, using tools like Tornado Cash to obscure the fund’s origin.
Ultimately, WazirX finds itself at a crossroads. The path forward demands fortitude, transparency, and effective engagement with its user base to restore trust in a landscape that is increasingly fraught with challenges. Whether the firm can successfully navigate these turbulent waters remains to be seen, but the stakes are undeniably high.