In the wake of a significant cyberattack, WazirX, one of India’s largest cryptocurrency exchanges, has announced plans to resume Indian Rupee (INR) withdrawals starting August 26, 2024. This move follows a brief suspension caused by a $230 million hack in July, which compromised a substantial amount of ERC-20 tokens.
Update on the WazirX Hack and Recovery Plan The July 18 attack left the platform scrambling to secure assets and reassess its security measures. Despite the severe implications of the hack, WazirX has been working diligently to address user concerns and restore full functionality to its services. The phased resumption of INR withdrawals is part of a broader recovery and restructuring plan following the incident.
Phased Withdrawal Resumption WazirX has outlined a detailed phased approach to resuming withdrawals:
- Phase 1 (August 26 to September 8, 2024): Users can withdraw up to half of the available 66% of their INR balances.
- Phase 2 (September 9 to September 22, 2024): Users will have access to their full 66% INR balances for withdrawal.
The remaining funds have been frozen by law enforcement agencies pending further investigation, affecting approximately 34% of user balances. These measures ensure that while the platform navigates legal complexities, it also prioritizes user access to their funds.
Reduction in Withdrawal Fees In an effort to ease the financial burden on its users, WazirX has also announced a significant reduction in withdrawal fees. The new fee structure reduces the withdrawal cost by 60%, lowering the fees from INR 25 to INR 10.
Crypto Withdrawals and Restructuring Plans The hack has left the exchange with insufficient crypto assets to cover all user liabilities, prompting a strategic reassessment of asset distribution. WazirX has opted to pursue a legal restructuring via a Scheme of Arrangement in Singapore. This structured approach will allow the exchange to propose a fair distribution plan to its users, which will require user approval to be implemented.
Legal and User-Centric Approach to Resolution The Scheme of Arrangement is a judicial process that provides a platform for WazirX and its users to agree on a restructuring plan. This plan will then be submitted for voting, requiring a majority approval to be enacted. This legal framework aims to ensure equitable treatment of all users affected by the hack.
Communication and User Involvement Recognizing the importance of transparency and user involvement, WazirX plans to engage its user base through polls and town hall meetings. These interactions are designed to gather feedback and align the restructuring plans with user expectations and preferences.
Conclusion WazirX’s proactive steps towards recovery and user recompense reflect its commitment to maintaining trust and integrity in its operations. The phased resumption of INR withdrawals, coupled with reduced fees and a structured legal approach to asset redistribution, are pivotal in stabilizing the platform’s operations and restoring user confidence post-hack. As the situation unfolds, WazirX continues to prioritize transparency and user-centric solutions to navigate its post-hack recovery.
