The recent $235 million hack on WazirX has brought to light some concerning issues regarding the exchange’s operations and ownership. Co-founder and CEO, Nischal Shetty, has tried to address some of these growing concerns by stating that he is still operating the exchange on behalf of the owners until the dispute is resolved. However, questions still remain about how trades are managed and how the exchange was able to reverse them. Shetty mentioned confidentiality obligations as the reason for not divulging more specifics about these matters, further adding to the ambiguity surrounding WazirX’s ownership.
Binance Acquisition Offer
The ownership dispute appears to have originated from a disagreement with Binance, which made an acquisition offer in 2019. While the details of the deal were not fully disclosed at the time, there was confusion surrounding the ownership structure. Binance’s former CEO, Changpeng Zhao, claimed that the acquisition was never completed and that Binance did not own any shares in Zanmai Labs, WazirX’s parent company. On the other hand, Shetty maintains that Binance controls key operational aspects of WazirX. The lack of clarity regarding ownership has only added more pressure on WazirX to clarify its position and restore user confidence.
Amidst the ownership dispute, WazirX has had to contend with an asset freeze and security concerns following the hack. This has forced the exchange to introduce a phased withdrawal system for Indian Rupees (INR), allowing users to only withdraw up to 50% of their available balance limit. Additionally, withdrawal fees have been reduced by 60% in an attempt to appease users. A restructuring plan has also been announced to deal with the aftermath of the hack, but the lack of transparency surrounding the process has left many users uncertain.
Call for Withdrawals
In light of the ongoing challenges, Shetty has advised users to withdraw their funds from the platform until more information about the restructuring process is provided. He emphasized that user safety is a top priority and recommended not keeping INR on the platform for the time being. The remaining 33% of funds that are inaccessible to users due to INR freezes further complicates the situation, with the timeline for crypto withdrawals remaining unclear.
The $235 million hack, allegedly linked to North Korean cyber actors, targeted one of WazirX’s multi-signature wallets, resulting in unauthorized fund transfers. While WazirX has published a preliminary incident report and filed a police complaint, there are conflicting claims from Liminal disputing the events leading to the breach. The challenge of addressing security concerns and ensuring the safety of user funds remains a priority for WazirX moving forward.
Leave a Reply