WazirX speeds up INR withdrawals after hack, but halts crypto trading for 6 months

WazirX has expedited its Phase 2 of INR withdrawals ahead of September 9. Crypto users on the platform can now access up to 66% of their INR balances. However, crypto trading on the exchange has been suspended for an additional six months.

On July 18, Indian crypto exchange, WazirX, lost over $230 million, roughly 45% of customers’ funds, in a cyberattack that is now crippling trading operations. Following the attack, the exchange consequently filed for a moratorium in the Singapore High Court, asking for a relief period to restructure its liabilities.

WazirX accelerates recovery plan, new concerns surface

On Tuesday, WazirX announced that Phase 2 of INR withdrawals had started before the scheduled date of September 9. 

Despite the fast-tracked start to the second INR withdrawal phase, the platform revealed that traders will have to wait another six months before resuming trading on the exchange.

Before the announcement on Tuesday, WazirX hosted a virtual town hall conference to detail their reorganization. Budhil Vyas, a crypto influencer, shared his dissatisfaction about the conference via X, stating that it raised more concerns than clarity. Vyas commented that WazirX failed to answer key questions, disabled comments, and only requested email inquiries. 

He remarked:

‟They said the same things they’ve been saying before. Still no clear info about the $235M hack. They’re blaming Liminal (another company) and not saying sorry. Liminal hasn’t said anything.” Vyas

Vyas also showed dissatisfaction with the platform’s six-month wait, saying it was “bad” for those who want access to their money. He added that WazirX also did not clearly explain why users had to incur legal expenses. 

Zettai, WazirX’s parent company, seeks investors’ support

Zettai, WazirX’s parent company, approached 11 crypto exchanges, each overseeing user bases ranging from 5.5 million to 100 million and handling daily transactions between $5 million and $4 billion, asking for investor support. The company has requested funding and partnerships from some of these companies.

Moreover, at the last town hall conference on Monday, Nischal Shetty, co-founder of WazirX, also expressed the exchange’s interest in seeking investors to aid in its recovery process and cover its losses. 

Shetty clarified that the six-month pause takes into account the intricacies of their recovery strategy and will be essential in integrating input from the company’s 4.3 million creditors. 

However, Jason Kardachi, managing director at Zettai’s advisory firm, Kroll, gave more of a downturn message, saying that even with investor’s support, the company would only recover about 55-57% of the lost crypto.