After the unfreezing of 66 percent of users’ INR balances on August 26, WazirX saw a surge in withdrawals from users in urgent need of funds. However, the momentum has since slowed down, with the platform advising users to retrieve their INR balances while financial restructuring efforts are underway.
The massive hack that led to a loss of over $230 million in a multi-signature wallet belonging to WazirX, overseen by Liminal Custody, has caused significant financial distress for users. This, coupled with the suspension of trading, withdrawals, and deposit services, has left 34 percent of users’ INR funds still frozen pending the completion of the investigation.
WazirX has teamed up with a financial restructuring firm called Kroll to assist in getting its books back in order. However, Kroll director George Gwee has stated that users may only be able to recover around 43 percent of their funds from the platform, with the best-case scenario being up to 57 percent of their deposits.
Last week, WazirX filed for a mortarium in a Singapore court, buying time to analyze its liabilities and reorganize its capital. It could take up to six months before a restructuring scheme is finalized by the exchange. However, the company has not provided a definite timeline for when crypto withdrawals will resume on the platform.
WazirX co-founder Nischal Shetty has stated that the team is in constant touch with relevant authorities to investigate the hack. While details of these discussions remain confidential, Shetty noted that there has been cooperation from both sides to find those responsible for the attack.
The WazirX team has chosen to avoid questions regarding its relationship with Binance, stating that the details are confidential. Binance had previously claimed to have acquired WazirX, but former Binance CEO Changpeng Zhao later stated that the transaction was never completed. This led to accusations from WazirX of Binance spreading false and misleading information about the situation in the market.
WazirX is facing a challenging period following the massive hack and subsequent financial distress. Users are advised to withdraw their funds while the platform undergoes financial restructuring efforts. Cooperation with authorities and legal proceedings are underway, but uncertainties remain regarding the recovery of user funds and the future of the platform. Only time will tell how WazirX navigates through these troubled waters and rebuilds trust with its user base.
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