The recent $234 million hack on the crypto platform WazirX has prompted the company to enter an initial 30-day moratorium as of August 28. This decision, pending approval from Singapore’s High Court for an extension, comes in light of the challenges faced by the platform following the security breach.
Rival platform CoinSwitch has announced its intentions to pursue legal action against WazirX in an attempt to recover approximately $9.6 million in digital assets that are currently trapped on the exchange. Despite multiple efforts to resolve the issue, CoinSwitch has been unable to retrieve the funds and expressed frustration over WazirX’s lack of clarity regarding a full recovery plan.
In response to the hack, WazirX has outlined a restructuring plan that aims to distribute the impact of the breach among its users. According to the plan, users will receive a share of the available token assets proportional to their account balances. The company estimates that it will need at least six months to finalize the restructuring plan and collaborate with stakeholders to recover funds.
WazirX co-founder and CEO, Nischal Shetty, emphasized the importance of unity and collaboration among users and creditors in the restructuring process. He highlighted the need for support from all parties involved to expedite the timeline for the recovery efforts. Despite the potential legal action by CoinSwitch, Shetty remains confident that all users will be treated fairly, regardless of the size of their claims.
CoinSwitch has reassured its users that the affected funds represent less than 1% of its total assets and is using treasury reserves to maintain a 1:1 ratio for user holdings. The platform’s decision to pursue legal action against WazirX underscores the challenges faced by companies in the crypto space when it comes to security breaches and fund recovery.
The ongoing developments surrounding WazirX and the legal action by CoinSwitch highlight the complexities and risks associated with operating in the crypto industry. As both platforms navigate through this challenging period, user support, transparency, and collaboration will be crucial in determining the outcome of the restructuring efforts and the resolution of the fund recovery process.