WazirX Gets Into A Legal Battle With Rival Indian Exchange CoinSwitch

Crypto exchange CoinSwitch is pursuing legal action against its fellow exchange, WazirX.

On 28 August 2024, CoinSwitch alleged that it has funds stuck on its rival exchange following its high-profile hack in July.

WazirX Hopes For A 30-Day Moratorium

📢 Moratorium Application Filed in Singapore Court

We wish to update all users of the WazirX Platform that we have taken the next step to address users' crypto balances following the 18 July 2024 cyberattack by filing for a moratorium with the Singapore High Court under the… pic.twitter.com/7IYES7pc6h

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 28, 2024

The lawsuit comes hot on the heels of WazirX announcing that it has filed for a 30-day moratorium with Singapore’s High Court. The request is to allow for breathing room during restructuring period.

A moratorium is a temporary suspension of an activity or law and is often used to address temporary financial difficulties. The exchange stated that a hearing date has not yet been set.

If the moratorium is approved, it’ll give the exchange time while it deals with restructuring. According to WazirX, this move “represents the most efficient way to address users’ cryptocurrency balances on the platform and facilitate recovery for users”.

On 14 July 2024, the WazirX exchange was hacked. The hack saw the thieves steal approximately $230 million worth of digital assets. The main tokens stolen in the cyber attack included Ethereum (ETH), Pepe (PEPE), Polygon (MATIC) and ShibaInu (SHIB).

Following the hack, WazirX quickly suspended all withdrawals, leaving users unable to access their funds which caused much fear and frustration. The exchange resumed partial withdrawals from August 26, with users able to withdraw up to 66% of their balance.

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CoinSwitch Seeks A Solution To Retrieve $9.7 Million In Company Assets

It's been over a month since WazirX, a major crypto exchange operating in India, claimed that a cyber attack on their platform led to the theft of $230 million (~ Rs 2000 cr) worth of funds.

We have attempted to be in regular touch with WazirX since the day of the incident but…

— CoinSwitch: India's Simplest Crypto App 🚀 (@CoinSwitch) August 28, 2024

CoinSwitch said that it has around $9.7 million worth of assets on the WazirX platform. This includes nearly $1.5 million in INR, $3.4 million in ERC-20 tokens and $4.75 million in other digital assets. CoinSwitch went on to say that this figure represents around 2% of its total funds. .

The firm claims that it has made regular attempts to contact WazirX since the incident. Thus far, a satisfactory solution for retrieving the stuck funds has not been found. The statement read, “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.”

In response to the situation, CoinSwitch stated that it has delved into its own treasury to ensure that a minimum 1:1 ratio for every user’s crypto holding on CoinSwitch is maintained. The exchange added that it holds funds 1.51 times the user assets invested through their platform.

It goes on to stress that regardless of the situation with WazirX, user funds on CoinSwitch are safe. To alleviate any customer fears, the firm plans to provide proof of reserves for the second time this year.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.