WazirX to Resume INR Withdrawals in Phases Following $230 Million Hack, Crypto Withdrawals Remain Suspended
In the wake of a significant cyberattack that resulted in the loss of approximately $230 million in July 2024, Indian cryptocurrency exchange WazirX has announced plans to partially resume withdrawals of Indian Rupee (INR) balances. The phased withdrawal process is set to begin on August 26, 2024, marking a cautious step towards normalcy for the beleaguered platform.
According to a statement released by WazirX on August 23, users will be able to withdraw up to 66% of their INR balances in two stages. From August 26 to September 8, customers can withdraw up to half of the 66% limit. The remaining portion will be available for withdrawal between September 9 and September 22. To facilitate this process, WazirX has also announced a 60% reduction in withdrawal fees, from INR 25 to INR 10.
However, the exchange emphasized that cryptocurrency withdrawals will remain suspended indefinitely. WazirX cited insufficient token assets to meet user liabilities due to the significant loss of ERC-20 tokens in the July 18 hack. To address this issue, the company plans to pursue a Singapore Scheme of Arrangement, a legal process aimed at facilitating an “equitable and user-approved distribution of cryptocurrency assets.”
The exchange clarified that while Zanmai Labs, the entity responsible for INR-related activities, has sufficient reserves to cover all INR user balances, approximately 34% of these funds are currently frozen. This freeze is due to ongoing investigations by various law enforcement agencies, though WazirX stressed that Zanmai itself is not the target of these investigations.
“We want to assure all users that Zanmai is not the target of any investigations that have led to the freezing of INR balances,” the exchange stated. “The funds were frozen by law enforcement agencies as a precautionary measure while they pursue their investigations against third parties.”
The timeline for the release of the frozen INR balances and the resumption of cryptocurrency withdrawals remains unclear. WazirX has committed to keeping users updated on developments and plans to involve them in the restructuring process through polls and town halls.
