Allegations Surface as CoinSwitch Accuses WazirX of Transferring $75 Million Post-Cyberattack
In a recent revelation that has stirred the crypto community, Ashish Singhal, co-founder of CoinSwitch, has accused rival Indian crypto exchange WazirX of transferring a substantial $75 million worth of user funds to global exchanges Bybit and KuCoin. This accusation comes in the wake of a cyberattack on WazirX in July 2024, which compromised a significant amount of assets.
Understanding WazirX’s Wallet Disclosure
Following the cyberattack, WazirX took a step towards transparency by releasing over 240,000 wallet addresses as part of an affidavit filed with the High Court of Singapore. This move is part of the exchange’s ongoing debt restructuring efforts. However, the vast amount of data released has reportedly left many users, especially in India where crypto literacy is still developing, bewildered and struggling to make sense of the information.
To address this confusion, CoinSwitch has developed and shared a public dashboard that tracks the movement of funds from WazirX’s wallets. According to this dashboard, approximately $72.13 million in crypto was transferred to Bybit and an additional $1.5 million to KuCoin following the breach.
“Think of this dashboard as just one piece of a complex puzzle that we are also trying to figure out,” remarked Singhal, promising further updates as the situation develops. He also encouraged users requiring different data perspectives to reach out to CoinSwitch for support.
The Impact of the WazirX Hack
The cyberattack on July 14 targeted WazirX, leading to a loss of $230 million worth of assets, primarily ERC-20 tokens stored in hot wallets. In response, WazirX halted all withdrawals, trapping users’ funds in the exchange. While INR withdrawals have since resumed on a limited basis, crypto withdrawals are still on hold as the exchange works to stabilize its operations and reduce network fees.
Amidst these challenges, WazirX’s parent company, Zettai Pte Ltd, secured a four-month moratorium from the Singapore High Court in August 2024, providing temporary relief to reorganize its finances.
Adding to the exchange’s woes is an ongoing legal tussle with CoinSwitch over $9.7 million in frozen funds. CoinSwitch claims it had deposited INR and other assets with WazirX prior to the attack, which were subsequently locked down post-incident. To safeguard its users, CoinSwitch utilized its internal treasury to maintain a 1:1 reserve ratio, ensuring that its customers were not directly affected by the dispute.
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The crypto community watches closely as these developments unfold, highlighting the vulnerabilities and the urgent need for enhanced security measures within the crypto exchanges. The situation between CoinSwitch and WazirX underscores the complexities and risks inherent in the crypto market, particularly in the areas of asset security and operational transparency.
As the legal proceedings continue, both exchanges are under scrutiny, and the outcomes will likely set precedents for how crypto platforms manage security breaches and inter-exchange disputes in the future.
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