WazirX Accused Of Suspicious Transfers Following July Hack

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As a researcher who has spent countless hours delving into the intricacies of the cryptocurrency world, I find myself deeply concerned about the recent allegations against WazirX and the $75 million transfer of user funds to exchanges like Bybit and KuCoin. The cyber attack on WazirX in July 2024 has already been a significant blow to the crypto community, and these latest revelations only add fuel to the fire.

Ashish Singhal, one of the founders of the Indian digital currency trading platform CoinSwitch, has pointed fingers at competitor WazirX for allegedly shifting approximately $75 million worth of user assets to foreign exchanges such as Bybit and KuCoin.

The allegations against the Indian exchange arose following the July 2024 cyber attack, as greater scrutiny fell upon its activities.

CoinSwitch made an announcement, providing a publicly accessible dashboard for monitoring wallet transactions that were derived from their exchange’s disclosed data.

WazirX Under Fire: Did They Transfer User Funds to Bybit and KuCoin?

It’s been alleged that WazirX, a cryptocurrency exchange, secretly moved around $75 million worth of users’ assets to other platforms like Bybit and KuCoin following the July 18 hack, without notifying their users about it.

Making sense of WazirX’s wallet disclosure for users

In response to a reported cyberattack on cryptocurrency exchange WazirX in July 2024, they’ve disclosed approximately 240,000 digital wallet addresses within an affidavit submitted to the High Court of Singapore.

These many wallet addresses can be…

— Ashish Singhal (@ashish343) October 21, 2024

In the ongoing legal dispute, the recent allegations mark another chapter. CoinSwitch took legal action against WazirX by filing a lawsuit when their assets were frozen, following the $230 million hacking incident that occurred on WazirX’s platform.

CoinSwitch introduced a monitoring platform to trace questionable transactions across their exchange, aiming to educate users about such issues and demonstrate the movement of funds.

The dashboard provides more than just a visual of the assets’ movement; it raises questions about certain internal management procedures within the company. Furthermore, it sparked worry among the cryptocurrency community regarding the exchange’s handling of users’ funds following a security breach.

The trading platform is struggling to resume normal operations following a cyber intrusion, with both parties engaged in a dispute over immobilized funds. Legal action is imminent due to this situation. Handling user assets amidst security threats is just one example of the intricate problems that crypto exchanges often encounter.

As a friendly heads-up, another hack has occurred. This time, it was Radiant Capital that fell victim, and they are currently working alongside the FBI in an effort to retrieve the $50 million USD that was taken. The attack exploited several developers’ hardware wallets using sophisticated malware.

Aiding WazirX Users with Post-Hack Transparency Tool

In a time when India’s cryptocurrency scene is navigating through its current state, this dashboard aims to shed light on wallet transactions.

During the extended process of debt reorganization, WazirX disclosed approximately 240,000 digital wallet identities in its recent court filing before the High Court of Singapore. It’s crucial that this information be made understandable for many users, particularly those in India, where knowledge about cryptocurrencies is still expanding.

CoinSwitch has developed a tool to monitor the flow of funds from their wallets. This tool reveals that, following the July 2024 cyberattack, approximately $72.13 million in cryptocurrency was transferred to Bybit, and an additional $1.5 million went to KuCoin.

According to CoinSwitch, this tracker serves as a crucial initial step in uncovering all details about this event. They will update it with additional information once more details become available.

In essence, Singhal stated that as these proceedings persist, legal restrictions still hold. This implies that for CoinSwitch, there are certain statements they can’t make openly. However, he emphasized that CoinSwitch is dedicated to maintaining transparency during this ongoing process.

He encouraged users to reach out to the team for any special data needs or tailored reports they might have. In addition, he expressed openness to hearing ideas on how the team could assist them more effectively at this time.

Approximately $230 million worth of assets, mainly ERC-20 tokens, are stored in these active wallets, have been potentially affected.

As a researcher, I’m compelled to share that due to a security breach, the platform has temporarily halted all withdrawal processes, specifically affecting user’s ability to withdraw funds. However, we’ve managed to restart partial operations for extremely limited Indian Rupee (INR) withdrawals. Regrettably, cryptocurrency withdrawals remain suspended as we work diligently to streamline our assets and minimize network fees.

CoinSwitch Demands $9.7 Million.

As a researcher, I find myself delving into recent developments concerning WazirX. In August 2024, the court in Singapore granted Zettai Pte Ltd, the parent company of WazirX, a four-month reprieve, often referred to as a moratorium. This temporary measure was designed to provide the exchange with the necessary breathing space to address its financial affairs and navigate through the restructuring process effectively.

However, the complications surrounding the recovery process are further intensified due to an ongoing legal dispute between the exchange and CoinSwitch regarding frozen funds totaling $9.7 million. On the very same day that the exchange requested a 30-day extension for the moratorium, CoinSwitch filed a lawsuit.

During the attack, CoinSwitch, having previously stored assets with WazirX, utilized funds from its own reserves to keep a 1-to-1 ratio, thereby shielding customers from any immediate impact as the dispute was being resolved.

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2024-10-21 17:16