- The beginning of the crisis
- A series of missteps
- WazirX’s dubious withdrawal strategy
- The untold stories of WazirX’s users
- Expert opinions: the fallout from WazirX’s missteps
- Legal troubles brewing for WazirX
The WazirX hack on July 18, 2024, impacted numerous users. Issues with recovery, withdrawal difficulties, and users left in the dark question whether they will ever get their funds back. Expert opinions and legal challenges add further pressure on the exchange.
The beginning of the crisis
On July 18, 2024, India's largest crypto exchange, WazirX, was hit by a major hack, allegedly carried out by the Lazarus Group from North Korea. The attack resulted in $235 million worth of crypto assets being stolen. Initially, 15,298 Ethereum (ETH) was taken before the stolen assets were swapped for other cryptocurrencies like Shiba Inu (SHIB), Polygon (MATIC), and Pepe Coin (PEPE), amounting to a total of 59,097 ETH. In response, WazirX suspended all withdrawals in an attempt to manage the damage, but the sudden halt only increased user frustration as they were left without access to their funds.
A series of missteps
Following the attack on July 18, WazirX attempted to deflect responsibility by blaming its custody partner, Liminal. WazirX claimed the breach was due to a discrepancy in a multisig wallet using Liminal's services. However, Liminal denied this, asserting that its infrastructure had not been compromised. Cryptosecurity firms pointed out vulnerabilities in WazirX's system that could have led to the hack. Nonetheless, WazirX continued to deny any wrongdoing.
WazirX’s dubious withdrawal strategy
On August 23, WazirX announced that INR withdrawals would resume, but only 66% of available funds could be accessed. The remainder was frozen due to ongoing investigations by law enforcement agencies. Users could withdraw their funds in phases from late August to mid-September. On September 2, during a town hall, WazirX and advisory firm Kroll announced plans to file for a moratorium in Singapore, which would temporarily protect them from lawsuits.
The untold stories of WazirX’s users
Victims of the hack shared their distressing experiences. Sana Afreen, Director of Partnerships at Rizzle, is one of many users with significant investments caught up in the chaos. 'With 2.5 million rupees (about $30,000) locked in crypto assets, this is a blatant breach of customer trust. Moving the case to Singapore only erodes further trust. WazirX must take responsibility for their mistakes.'
Expert opinions: the fallout from WazirX’s missteps
Experts like Suraj Sharma and anonymous representatives from the crypto community have criticized WazirX's lack of transparency and responsibility. They warned that shifting legal proceedings to Singapore might be a tactic to avoid accountability under Indian law.
Legal troubles brewing for WazirX
Legal experts like Siddhant Pandey advise that Indian customers can still seek legal redress within India. He recommends pursuing claims through the National Consumer Disputes Redressal Commission (NCDRC), emphasizing that users should contest overseas arbitration attempts.
The situation surrounding the WazirX hack continues to evolve. User stories and expert opinions paint a bleak picture of recovery, with legal disputes adding further complexity. WazirX faces mounting pressure to act responsibly and restore customer trust.
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