WazirX Faces Legal and Financial Challenges Following Crypto Theft
WazirX Sets Aside Millions to Cover Legal Costs
WazirX, an Indian cryptocurrency exchange, has set aside millions of dollars to cover legal costs related to the theft of hundreds of millions of dollars in crypto after a cyberattack in July brought the exchange to its knees.
Zettai Files Affidavit to Request Moratorium
On Wednesday, Singapore-based Zettai Pte Ltd, the holding company of WazirX, filed an affidavit with the High Court of Singapore, requesting a 30-day moratorium to facilitate discussions with investors and creditors to stabilize the platform.
Moratorium Seen as Essential for Platform’s Continuity
The moratorium, if granted, is seen as essential for ensuring the platform’s continuity and preventing further legal disruptions. WazirX and Zettai did not immediately return requests for comment.
WazirX Suspends Withdrawals, Works to Restore User Funds
WazirX has suspended withdrawals and is working to restore user funds following the attack that caused significant financial strain after attackers fled with $230 million in various cryptocurrencies, including $102 million worth of Shibu Inu tokens.
Attack Leaves Users Stranded, Trust Shattered
The attack has left many users stranded, while trust in the exchange has been shattered. Attempting to assuage concerns, Nischal Shetty, WazirX’s co-founder, said Thursday the exchange was working to resolve the issue quickly.
Rival Exchange CoinSwitch Takes Legal Action
Rival exchange CoinSwitch has taken legal action against its beleaguered competitor over funds stuck on WazirX’s platform.
Zettai Reports Liquid Assets, Engages Financial and Legal Advisors
Zettai reported its liquid assets include $284 million in crypto, with an additional $12 million reserved for ongoing investigations, legal proceedings, and restructuring efforts of its liabilities.
The company is also engaging financial and legal advisors to classify user token balances, rebalance available assets, and provide in-kind crypto distributions to users instead of fiat.
Zettai is reportedly in discussions with 11 potential investors, described as “white knights,” who are large crypto exchanges and trading businesses that could inject capital and support the recovery of user funds.
Ongoing Dispute with Binance Complicates Situation
The ongoing dispute with Binance, which began after Binance attempted to terminate WazirX wallets and later distanced itself from the platform in 2022, has further complicated the situation.
Despite Binance’s initial claim of acquiring WazirX in 2019, the ownership and control of the platform remain contentious.
Zettai Seeks Six-Month Window for Complete Crypto Withdrawals
In any case, Zettai has taken control of WazirX’s assets and is seeking a six-month window for complete crypto withdrawals. The holding company has tapped zeroShadow, a third-party blockchain forensics firm, to trace the stolen assets.
The company said it has contacted over 500 crypto exchanges to block identified wallet addresses linked to the stolen assets.
Conclusion
WazirX’s situation highlights the importance of robust security measures and swift response to cyberattacks in the cryptocurrency industry. As the exchange works to restore user funds and stabilize its platform, it remains to be seen how this saga will unfold.
FAQs
Q: What happened to WazirX’s funds after the cyberattack?
A: Attackers fled with $230 million in various cryptocurrencies, including $102 million worth of Shibu Inu tokens.
Q: What is Zettai’s plan to restore user funds?
A: Zettai is working to restore user funds, engaging financial and legal advisors to classify user token balances, rebalance available assets, and provide in-kind crypto distributions to users instead of fiat.
Q: Who is involved in the ongoing dispute with Binance?
A: Zettai, WazirX, and Binance are involved in the ongoing dispute, which began after Binance attempted to terminate WazirX wallets and later distanced itself from the platform in 2022.
