After the $234 million hack of WazirX in July, the crypto platform has found itself in a legal battle as CoinSwitch announced its intention to pursue legal action to recover approximately $9.6 million in digital assets trapped on WazirX’s exchange. Following this development, WazirX entered into an initial 30-day moratorium to draft a restructuring plan, pending a decision by Singapore’s High Court on whether to grant an extension.
WazirX estimates that it will need at least six months to finalize the restructuring plan and collaborate with stakeholders. The company emphasized that the moratorium provides crucial breathing room to address users’ crypto balances and work toward recovering funds. Under the planned restructuring, the impact of the hack would be distributed among users, who would receive a share of the available token assets proportional to their account balances. The timeline for restructuring depends on how quickly the firm and its creditors can agree on a path forward.
In response to the funds trapped on WazirX’s platform, CoinSwitch announced that it has substantial assets stuck on the exchange and has been unable to recover the funds despite multiple attempts. The lack of clarity from WazirX regarding a full recovery plan has led CoinSwitch to pursue legal action to recover the funds. While the affected funds represent less than 1% of its total assets, CoinSwitch is using its treasury reserves to maintain a 1:1 ratio for user holdings.
Despite the potential lawsuit from CoinSwitch, WazirX’s co-founder and CEO, Nischal Shetty, remains committed to treating all users fairly, regardless of the size of their claims. He emphasized the need for unity and collaboration to move forward with the restructuring plan. Shetty acknowledged the importance of support from stakeholders in the effort to recover funds and address the aftermath of the hack.
The aftermath of WazirX’s $234 million hack has led to a complex legal battle involving CoinSwitch and regulatory authorities. The moratorium and restructuring plan aim to provide a framework for recovering funds and addressing users’ concerns. While the timeline for restructuring remains uncertain, collaboration and unity among stakeholders will be key in navigating the challenges ahead.
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