Moreover, before this unfortunate incident, the exchange boasted 1.6 crore active users, with 44 lakh holding crypto assets. In response to mounting pressure from affected users, measures were introduced allowing for limited INR withdrawal in two phases, alongside a six-month window for complete cryptocurrency withdrawal.
Insights from the WazirX Affidavit
The details emerge from a comprehensive 52-page affidavit filed by the exchange’s parent company, Zettai Pte Limited, in the Singapore High Court. This document seeks a moratorium under Singapore’s Insolvency, Restructuring and Dissolution Act 2018, highlighting the efforts to address and mitigate the aftermath of the cyber attack.
Hostile and Frustrated Users
According to the affidavit, the exchange anticipates that the "frustrated and hostile users" may initiate legal actions in pursuit of reclaiming their funds. This scenario underscores the multifaceted challenges facing the platform, including navigating legal intricacies and managing user grievances effectively.
Socialistic Loss-Sharing Policy
The recovery strategy outlined in the affidavit includes a 30-day automatic moratorium to shield the company from litigation and halt any dissolution processes. This plan involves equitable distribution of the remaining assets ($284 million) among the affected users, aligning with principles aimed at ensuring fairness for unsecured creditors. Additionally, the company is actively engaging with potential investors to facilitate asset recovery and manage operational expenses.
$12 Million for Legal Fees, Investigation Costs, and More
The proactive allocation of $12 million underscores the exchange’s commitment to addressing the legal challenges and operational hurdles encountered in the wake of the cyber heist. This fund is earmarked for covering an array of costs including legal fees and the extensive investigation required to navigate the platform’s recovery.
Upcoming Town Hall Session on September 2
In a bid to clarify its position and future actions, the exchange has scheduled a town hall session. This initiative aims to provide transparency, address user concerns, and showcase the exchange's dedication to stabilizing the platform and ensuring its long-term viability.
Dispute between the Exchange and binance
The affidavit also brings to light a dispute concerning the control and ownership of the exchange, pinpointing significant disagreements with binance. This ongoing conflict adds another layer of complexity to the exchange’s recovery efforts and highlights the intricate relationships within the cryptocurrency exchange ecosystem.
Conclusion
As the exchange navigates through its recovery process, stakeholders are left with pressing questions regarding the safeguarding of their interests and the transparency of the platform’s operations. Amidst diminished trading volumes and wavering investor confidence, the path to resolution remains fraught with uncertainty. The broader implications for the cryptocurrency industry, particularly concerning security practices and legal protections, are profound, as exchanges and users alike grapple with the challenges of an evolving digital finance landscape.
In summary, this case not only underscores the technological and security vulnerabilities inherent to digital asset exchanges but also highlights the legal, operational, and reputational challenges that can arise in the aftermath of such incidents. As the industry continues to mature, the lessons learned from these events will likely shape the development of more robust security measures and legal frameworks to better protect against and respond to future cyber threats.
