WazirX is coping with frozen funds, worried consumers, significantly lower holdings, and a compromised wallet hack. Consumers are awaiting clarification and compensation from the cryptocurrency exchange that asserted to be the biggest by volume in India. The website, which was formerly billed as the biggest cryptocurrency exchange in India based on traffic, is currently dealing with the fallout from a wallet hack that almost destroyed the value of its exchange assets.
Has the withdrawal of funds resumed?
Following many days of consumer uncertainty, WazirX announced that it would seek a “Singapore Scheme of Arrangement.” Put another way, WazirX executives will provide a plan for debt restructuring that users can vote on and accept and that will subsequently be approved by the court.
The aftermath of the WazirX wallet hack has left users frustrated and uncertain. The lack of a clear schedule for the restructuring plan and the limited control over their locked-up funds has sparked outrage. The confusion deepened when WazirX decided to take the case to a foreign court, leaving many baffled as to why an Indian exchange would do so.
Amidst this turmoil, WazirX announced that it would lower withdrawal costs and gradually resume INR withdrawals starting on August 26. However, the wallet hack’s impact became even more evident when WazirX revealed that due to its rupee operating business, Zanmai, handling the frozen money, eligible customers with INR balances would only be allowed to withdraw up to 66% of their holdings. This development further fueled user dissatisfaction, highlighting the ongoing challenges in the wake of the wallet hack.
What is the response from customers?
Customers of WazirX have deluged CEO Shetty with everything from prayers and supplications to threats and insults on the social networking site X. Many predict that when cryptocurrency withdrawals are once again permitted, the present phase of soaring cryptocurrency prices will have ended. Some people require their money for regular costs.
Scammers on X are preying on defenseless clients, and Shetty’s detractors allege they are being ignored and blacklisted. Some who back the CEO are pressuring irate clients to agree to the moratorium in an attempt to dissuade them from pursuing independent legal action. Claimed cryptocurrency attorneys and “experts” are taking advantage of the publicity potential. Other cryptocurrency exchanges in India are either separating from WazirX or establishing safety funds.
Why does WazirX not utilize its income to pay its users?
Many enraged merchants are questioning Shetty about this. However, the CEO stated that such a move was not feasible because he sold the platform back in 2019 and needed to control WazirX.
Users were even more alarmed by this news because many were unaware of the previous issue surrounding WazirX’s purported acquisition by the global cryptocurrency exchange Binance. But Binance subsequently broke away from WazirX, and its leadership has now changed.
According to U.S. authorities, Changpeng Zhao, the former CEO and co-founder of Binance, entered a guilty plea for neglecting to maintain an “effective” anti-money laundering (AML) program on his platform.
Shetty stated that he could not comment on WazirX’s ownership because of confidentiality obligations. He did, however, add that WazirX was looking at other options, including possible partners, recovering stolen money, developing new product concepts that would allocate funds to customers, and other rescue finance methods.
In India, WazirX is also facing increasing legal pressure. For instance, the cryptocurrency network CoinSwitch disclosed that it was exposed to WazirX and that its money was trapped there.
According to CoinSwitch, it used its treasury to ensure that each user’s cryptocurrency ownership on the site was at least 1:1.
What is ahead for traders?
The WazirX wallet hack has left customers in a state of uncertainty, grappling with frozen funds, unclear timelines, and limited communication from the exchange. While WazirX has announced steps toward a restructuring plan and the gradual resumption of INR withdrawals, the response has been mixed, with many users expressing frustration and concern.
The wallet hack has not only impacted WazirX’s operations but also shaken the confidence of its users, who are now left waiting for a resolution. As the exchange navigates legal challenges and explores recovery options, customers are hoping for clearer communication and a swift resolution to regain access to their funds. The road ahead may be challenging, but WazirX’s ability to rebuild trust will be crucial in determining its future in the competitive cryptocurrency landscape.
