WazirX, India’s largest cryptocurrency exchange, has been in the spotlight after suffering a cyberattack that led to the loss of nearly 45% of its crypto holdings. According to Ashish Singhal, co-founder and CEO of CoinSwitch, WazirX transferred approximately $73.63 million worth of crypto assets to global exchanges Bybit and KuCoin following the breach.
In a post on X (formerly Twitter) on October 21, Singhal revealed that $72.13 million of the funds were sent to Bybit and $1.5 million to KuCoin.
The July 2024 Cyberattack: A Major Blow to WazirX
In July 2024, the company fell victim to a significant cyberattack that resulted in the loss of crypto assets stored in one of its multisig wallets. The platform, which holds accounts for 33% of India’s crypto users, saw nearly 45% of its total holdings vanish in the attack. This incident triggered a wave of scrutiny and criticism within the cryptocurrency community.
In response to the hack, the company was ordered by a Singapore Court to disclose the wallet addresses of over 240,000 affected accounts. However, the published list of addresses left many users confused and unsure of how to track their funds.
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CoinSwitch’s Role: A Dashboard to Track Wallets
To address the confusion, CoinSwitch developed a public dashboard that allows users to track and manage the funds tied to these disclosed wallet addresses. This move, as explained by Singhal, was part of CoinSwitch’s broader effort to recover their funds from WazirX.
We are pursuing legal action against WazirX to recover our funds. Our dashboard is just one piece of the puzzle to help crypto investors navigate this situation
Singhal stated.
According to CoinSwitch, they have Rs 12.4 crore in INR, Rs 28.7 crore in ERC20 tokens, and Rs 39.9 crore in other tokens still stuck on the the Indian crypto platform following the hack.
WazirX’s Response: A Challenge to CoinSwitch
In response to Singhal’s claims, WazirX took aim at CoinSwitch, pointing out that while CoinSwitch had built a dashboard for WazirX’s wallet addresses, it had yet to provide its own Proof of Reserve (POR) in real-time for its customers.
A spokesperson for WazirX remarked, “CoinSwitch users have been demanding a real-time Proof of Reserve for years, and yet CoinSwitch has not delivered. It’s easy to build a dashboard, but the real challenge is maintaining transparency with your own customers.”
WazirX’s spokesperson also highlighted their own commitment to tracking real-time wallets and urged CoinSwitch to improve its transparency before critiquing others.
Ongoing Legal Proceedings and Industry Implications
CoinSwitch’s legal battle with WazirX is just one aspect of the fallout from the cyberattack. The incident has raised concerns about security, transparency, and fund recovery within the cryptocurrency sector, especially in markets like India where the regulatory framework for digital assets is still evolving.
As the story unfolds, the crypto community is closely watching how both WazirX and CoinSwitch manage the aftermath of the attack, especially in terms of recovering funds and maintaining trust with their respective user bases.
WazirX’s $230 million hack has set off a chain reaction of legal actions, transparency concerns, and trust issues in India’s crypto market. As WazirX works to recover from the cyberattack and CoinSwitch pushes for accountability, the outcome of these events could set important precedents for how crypto exchanges operate in the country moving forward
