WazirX, founded by Nischal Shetty, is facing difficulties in finding secure storage for its remaining funds after a major hack.
Challenges in Storing Funds
According to Nischal Shetty, his team is struggling to find a custody provider willing to store the remaining 55% of customer funds. This difficulty stems from a loss of reputation following the hack. Shetty confirmed that he has contacted five different providers but none could accommodate all of WazirX's crypto tokens.
Proof of Reserves Plan
The exchange plans to implement a Proof of Reserves (POR) mechanism, revealing holdings across three categories: cold wallets, third-party services, and over 240,000 user wallets. Shetty emphasized the commitment to transparency, stating that overall balances for unswept wallets will be shared first, with more detailed disclosures to follow.
User Reactions and Challenges
Recent reports revealed WazirX transferred ₹606 crore to the unregistered exchange ByBit without notifying its users, raising questions about the exchange's transparency and reliability. Shetty acknowledged the challenges with managing data across wallet categories, particularly with third-party involvement. Interim balances will be maintained on exchanges supporting these tokens.
WazirX aims to implement Proof of Reserves to restore trust, but users remain concerned about the exchange's reliability following recent events.