CoinSwitch is suing WazirX in an attempt to recover $9.65 million of its funds
As of now, CoinSwitch has not given specifics about the lawsuit it is taking against WazirX.
Indian cryptocurrency exchange CoinSwitch has made the decision to file a lawsuit against its problematic competitor WazirX in an effort to retrieve money that became trapped on the latter’s platform after a breach last month. CoinSwitch revealed in a thorough article on X that WazirX was used to conserve two percent of its entire assets, or around Rs. 810 crore (approximately $9.65 million). CoinSwitch’s assets were held because WazirX blocked all withdrawals after one of its multi-sig wallets was compromised in July. According to CoinSwitch, it employed its own treasury to guarantee a 1:1 ratio for customers’ cryptocurrency holdings on the site.
According to CoinSwitch, in its capacity as an exchange aggregator, it kept 7% of the liquidity on other exchanges. The exchange disclosed that it had 12.4 crore Indian rupees in cash, 28.7 crore ERC20 tokens, and 39.9 crore other tokens on WazirX. CoinSwitch is concerned that a full recovery of these monies would not be achievable due to WazirX’s contentious approach to financial restructuring.
Legal Action Looms: CoinSwitch’s Next Steps Against WazirX
“According to the WazirX claim, only ERC20 tokens were impacted in the alleged cyber-attack. That translates to less than one percent of total CoinSwitch funds,” the exchange said on X. “We have attempted to be in regular touch with WazirX since the day of the incident but have not been able to reach a solution to recover the funds that are stuck on their platform. So, we are now taking steps, including legal action.”
As of now, CoinSwitch has not given specifics about the lawsuit it is taking against WazirX. Additionally, CoinSwitch guaranteed customers that the money they had on the site was secure. The exchange announced that it will also release a transparency report in the next few days.
“Overall, we hold funds that are 1.51 times the user assets invested through CoinSwitch. Our total assets, which are significantly more than the user holdings, give us the ability to absorb external shocks,” the exchange claimed.
WazirX hasn’t responded to the news in the open yet. The cryptocurrency exchange has been contacted by Gadgets360 for comment.
Zettai Pte Ltd., the primary stakeholder company of WazirX, requested a moratorium this week in order to reorganize its finances and give itself some breathing room. According to Zettai’s application, which was submitted to a Singaporean court, WazirX and the company estimate that it may need a minimum of half a year to develop a plan that, if accepted by the creditors and authorized by the Singaporean court, “would be legally binding on all relevant parties.”
A breach occurred on July 18 on one of WazirX’s multi-sig wallets that Liminal Custody was in charge of, resulting in the loss of more than $230 million, or about Rs. 1,931 crore. Users who were impacted by this assault are perplexed and agitated since Liminal and WazirX have both said, citing internal investigations, that their respective systems were not compromised in this attack.
After the incident, WazirX halted all trading, withdrawal, and deposit services. Users of the exchange were able to conduct withdrawals of up to 66 percent of their cash in Indian rupees this week. While the investigation into the issue is ongoing, each user’s remaining 34% of money are still locked. WazirX’s cryptocurrency withdrawal policy is now in effect.
The primary suspect in this hack is the notorious Lazarus Group of North Korea. However, confirmation from WazirX is still pending.
You might also be interested in – WazirX hit by devastating hack, Over $230 million in Crypto funds stolen
