The Fallout from WazirX’s $234 Million Hack

The aftermath of the $234 million hack on WazirX has thrown the crypto platform into a 30-day moratorium, pending a decision by Singapore’s High Court on whether to extend the freeze. This move came after rival platform CoinSwitch announced its intention to pursue legal action in order to recover approximately $9.6 million in digital assets that are currently stuck on WazirX’s exchange.

Zettai Pte, the company responsible for WazirX’s operations, filed for the moratorium on August 27, triggering an automatic freeze for 30 days. During this time, WazirX aims to draft a restructuring plan to handle the aftermath of the hack. However, the company believes that it will need at least six months to finalize the plan and work with stakeholders to implement it.

The planned restructuring involves distributing the impact of the hack among users, who will receive a share of the available token assets proportional to their account balances. CEO Nischal Shetty stressed the importance of unity among all parties involved in order to move forward with the restructuring process. He emphasized that collaboration and support from users are essential for a successful recovery.

Amidst the chaos, CoinSwitch revealed that it has substantial assets trapped on WazirX’s platform, including fiat currency, ERC20 tokens, and other digital assets. Despite multiple attempts to resolve the issue with WazirX, the company has been unsuccessful in recovering the funds and criticized the lack of clarity regarding a full recovery plan. As a result, CoinSwitch has made the decision to pursue legal action to recover the trapped assets.

Despite the looming lawsuit, WazirX remains determined to treat all users fairly, regardless of the size of their claims. CoinSwitch assured its users that the affected funds represent less than 1% of its total assets and it is using treasury reserves to maintain a 1:1 ratio for user holdings. The uncertainty surrounding the aftermath of the hack highlights the challenges and risks associated with the world of cryptocurrency exchanges.