WazirX to resume phased withdrawals of 66% INR balances after cyberattack

Cryptocurrency exchange WazirX said that users will soon be able to withdraw up to 66% of their INR balances following a prolonged suspension due to a cyberattack on July 18, 2024.

Starting August 26, 2024, users will be able to withdraw their INR balances in a phased manner. During the first phase, from August 26 to September 8, users can withdraw up to half of the 66% limit. The remaining half will be available for withdrawal from September 9 to September 22.

Currently, 34% of INR balances remain frozen due to ongoing disputes and investigations by law enforcement agencies (LEAs), even though the platform's INR-related operations, managed by subsidiary Zanmai Labs Pvt Ltd, were not directly impacted by the attack, WazirX clarified.

"The funds were frozen by LEAs as a precautionary measure while they pursue their investigations against third parties. All INR balances remain secure and will be made available for withdrawal once the respective investigations and disputes are concluded," Wazirx said in a blog post.

"While the timeline for the release of these frozen INR balances is currently unclear, we want to reassure you that we are doing everything in our power to expedite this process for the benefit of our users," the post added.

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In addition to resuming INR withdrawals, WazirX has reduced withdrawal fees by 60%, lowering the cost from Rs 25 to Rs 10.

While the company did not specify when it will resume cryptocurrency withdrawals, it said that it will implement a Singapore Scheme of Arrangement—a legal process that allows a company to propose a plan to restructure its debts.

"We have decided to pursue a Singapore Scheme of Arrangement to facilitate an equitable and user-approved distribution of cryptocurrency assets pursuant to a Scheme. A Scheme is a necessary step to ensure that users of the platform are treated fairly and in line with user preferences so that the outcome remains legally binding on all relevant parties," the blog said.

The cryptocurrency exchange faced a large-scale cyberattack on July 18, 2024, leading to the theft of $234.9 million worth of assets. The breach occurred through Liminal Custody Solutions, a third-party service managing WazirX's reserves, despite the platform's use of a multi-signature wallet for added security.

In a bid to get its stolen reserves back, the exchange has offered a bounty of up to $23 million. The initiative invited white hat hackers, blockchain forensics experts, and cybersecurity professionals globally to assist in the recovery efforts.