1. Background of the Case
2. CoinSwitch’s Trapped Funds
3. Challenges in India’s Crypto Industry

CoinSwitch, a major cryptocurrency exchange, plans to sue WazirX to recover ₹810 million ($9.65 million) in assets trapped after a cyber attack.

Background of the Case

CoinSwitch, one of India's leading cryptocurrency exchanges, is preparing for a legal battle with WazirX. The lawsuit stems from ₹810 million ($9.65 million) in assets trapped following a cyber attack that led to the theft of $230 million in digital assets from WazirX. WazirX proposed a 'socialized loss' strategy to distribute the loss among its users, to which CoinSwitch objected. Despite CoinSwitch's efforts to resolve the issue with WazirX, the assets have not been returned, leaving the company with no choice but to take legal action.

CoinSwitch’s Trapped Funds

The funds stuck on WazirX represent approximately 2% of CoinSwitch’s total assets, including ₹124 million in fiat currency, ₹287 million in ERC20 tokens, and ₹399 million in other cryptocurrencies. Despite this setback, CoinSwitch assures its users that its overall assets are 1.51x their holdings, maintaining at least a 1:1 ratio by tapping into its treasury.

Challenges in India’s Crypto Industry

This legal battle underscores the growing challenges in India’s crypto industry, which is already strained by regulatory uncertainty and security issues. The WazirX incident, the country’s largest crypto heist, has further shaken trust in the sector. WazirX proposed returning only 55% of customer holdings, locking the remaining 45% in USDT-equivalent tokens, but the recovery efforts may take years, and success is not guaranteed.

The situation continues to develop. Stay tuned for updates to keep abreast of new developments.