Indian crypto exchange WazirX granted conditional relief following $234 million hack, ensuring transparency and creditor protections.
WazirX Granted Moratorium by Singapore Court
In a major development for Indian cryptocurrency exchange WazirX, a Singapore court has granted the platform a four-month conditional moratorium. This decision comes in the wake of WazirX’s devastating $234 million hack in July, which affected around 45% of its customers’ funds. The exchange initially sought a six-month reprieve but was awarded four months instead.
Conditions for the Moratorium
As part of the court ruling, WazirX must adhere to several conditions to ensure transparency. These include revealing the addresses of its wallets through a formal court affidavit, disclosing its book of accounts within six weeks, and responding promptly to user queries. Additionally, the exchange must ensure that any future voting related to its next steps will be conducted on an independent platform to maintain integrity and impartiality.
Loss of $234 Million in July Hack
The hack, which took place in July, saw WazirX lose approximately $234 million worth of cryptocurrency—equivalent to 45% of its customers’ holdings. The hacker has reportedly been laundering the stolen funds through Tornado Cash, a platform designed to obscure transaction trails. Legal experts have cautioned that customers are unlikely to recover their funds in cryptocurrency terms.
Legal Proceedings and Court Decision
The Singapore High Court heard the case on Wednesday, with a decision delivered the following day. During the proceedings, the presiding judge asked WazirX to consider releasing information about any assets other than the crypto tokens it holds. Despite the significant losses, the judge noted that WazirX had acted in “good faith” by immediately filing for the moratorium to protect creditors and customers.
Founder’s Statement on WazirX’s Future
In a statement following the court’s decision, WazirX founder Nischal Shetty emphasized the company’s proactive approach. “Our immediate filing for the moratorium was a decisive step taken to ensure the fastest, fairest, creditor-approved, legally binding path to resolution where creditors have a token choice and potential upside in a bull run,” Shetty said.
Road to Recovery
As WazirX navigates the aftermath of the hack, the moratorium provides a crucial period for the exchange to restructure its operations and potentially recover some of the lost assets. The exchange will also use this time to address customer concerns and work on resolving the financial discrepancies caused by the hack.
WazirX’s Next Steps
The conditions set by the court reflect a larger effort to rebuild trust between WazirX and its user base. By publicly disclosing key financial information and responding to user inquiries, WazirX aims to demonstrate its commitment to transparency and accountability. Furthermore, the independent voting process for future decisions will give stakeholders a voice in determining the exchange’s direction.
Impact on the Crypto Community
The WazirX hack serves as a stark reminder of the risks inherent in the cryptocurrency space. However, the exchange’s swift legal action and cooperation with the court showcase its dedication to finding a resolution. While customers may not be fully compensated in crypto, the moratorium could pave the way for a fairer settlement and a more robust framework for future operations.
Rebuilding Customer Trust
As WazirX moves forward under the court’s guidance, the exchange is focused on rebuilding trust with its users and creditors. By complying with the court’s conditions and working to address financial losses, WazirX hopes to stabilize its operations and eventually regain its standing in the crypto industry.
Steps Toward a Fair Resolution
With the moratorium in place, WazirX has a crucial window to recover and plan its next moves. The exchange’s focus on transparency and legal compliance could be the key to overcoming this significant setback and regaining the trust of its users and the broader crypto community.
Disclaimer:
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