WazirX Reveals Phased Resumption of Indian Rupee Withdrawals

Indian cryptocurrency exchange WazirX announced on August 23 that INR withdrawals will restart in phases beginning August 26, following a significant cyberattack on July 18.

The incident led to the theft of over $230 million, severely impacting the exchange’s operations and halting both cryptocurrency and INR withdrawals.

The attack resulted in the suspension of withdrawals and trading as the team worked to address the situation and formulate a solution.

WazirX Resumes INR Withdrawals After Cyberattack

Important Announcement Regarding INR Withdrawals and Next Steps for Crypto
The past month has been challenging for users of the WazirX platform due to the cyberattack on July 18, 2024, and the subsequent suspension of withdrawals and trading to mitigate the impact on the platform. We… pic.twitter.com/XdAr3V3TOp

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 23, 2024

In response to the cyberattack, WazirX has opted to implement a Singapore Scheme of Arrangement. This legal framework ensures a fair and user-approved allocation of the remaining cryptocurrency assets.

The exchange underscored the significance of this method, emphasizing the necessity for legal compliance and user participation in the distribution process.

WazirX clarified that the loss of a considerable amount of ERC-20 tokens has hindered the exchange’s ability to fully satisfy its cryptocurrency obligations.

To promote fairness, WazirX intends to pursue a Singapore Scheme of Arrangement.

This legal process will facilitate an equitable distribution of cryptocurrency assets, with users voting on and endorsing the restructuring proposal.

The platform highlighted that user feedback will be essential, and all significant developments will be communicated through polls and town hall meetings.

WazirX plans to lift the suspension on INR withdrawals starting August 26. Withdrawals will be enabled in two phases, allowing users to access up to 66% of their INR balances.

In the first phase, from August 26 to September 8, users can withdraw up to half of this limit.

The second phase, from September 9 to September 22, will permit users to withdraw the full 66%.

To facilitate the withdrawal process during this challenging period, WazirX has also reduced withdrawal fees by 60%, decreasing the cost from INR 25 to INR 10.

WazirX expressed regret over the disruption caused by the cyberattack and recognized the difficulties faced by users.

Users Demand Immediate Action as Exchange Struggles with Aftermath

On July 18, WazirX encountered a significant security breach, resulting in the theft of $234.9 million in cryptocurrency assets. The hack was initially detected by Web3 security firm Cyvers, which observed multiple suspicious transactions originating from WazirX’s Safe Multisig wallet on Ethereum.

The breach prompted WazirX to take swift action, including securing the remaining assets and temporarily halting cryptocurrency and Indian rupee withdrawals on the platform.

In response to the attack, WazirX announced on X that it was “actively investigating the incident” and would provide updates as the situation progressed. The exchange has since concentrated on restoring user trust and enhancing its security protocols, with plans to publish a list of new wallets after completing asset migration.

Liminal, a digital asset custody firm, released a report indicating that compromised WazirX machines may have contributed to the exploit, adding further complexity to the situation.

On August 14, WazirX announced that it was migrating the remaining assets held with Liminal to new multi-signature (multisig) wallets that require multiple signatures for transaction validation.

In WazirX’s case, their multisig wallet had six authorized signers—one from Liminal and five from WazirX.

Amid these security measures, the hacker responsible for the breach converted nearly $150 million of altcoins into Ether, likely to prevent the funds from being frozen or blacklisted.

Following the hack, WazirX conducted scheduled maintenance on August 16, during which they reversed all trades executed after the withdrawal suspension on July 18.

While users can now view their funds in their accounts, the exchange has yet to provide a definitive timeline for when withdrawals will resume.

This lack of clarity, combined with WazirX’s initial proposal of a socialistic loss-sharing model of 55/45, has intensified investor frustration and opposition.

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