WazirX Townhall Meeting Highlights: Security Plans, Recovery Attempts & More

One of the largest crypto exchanges has recently gone live on YouTube to run the first WazirX townhall meeting. This comes after the major crypto hack, losing $ 235 million from this Indian exchange. This WazirX townhall meeting was in an attempt to interact with the users and update them on the current situation of the exchange. With this, the official has shared many relevant information to keep the exchange users informed.

The Townhall meeting was hosted by the Managing Director of the Restructuring Business, Jason Kardachi, Director George Gwee, and Zettai founder, Nischal Shetty. They provided significant insights into the ongoing recovery of the crypto assets after the WazirX hack. This includes the restructuring of crypto balances, a moratorium for protection, and much more.

WazirX Townhall Meeting Revealed The Reason Behind The Hack

Nischal Shetty has presented a clear picture of the exchange’s current situation after the cyber attack. More importantly, he provided full details on the exchange and how the cause of the WazirX is still unidentifiable.

As per him, ever since the cyber attack on August 18, the team has been actively looking at the breach. More importantly, how the hackers could have stolen the despite four-step signature authentications. The breach was in one of their cold wallets, carrying Ethereum and ERC-20 tokens. Moreover, these funds were secured under Liminal, a third-party security provider, and needed four signatures, three from WazirX and one from Liminal for authentication.

At the time of the hack, the WazirX team witnessed a transaction for the Gala tokens on the Liminal Website. The WazirX team went ahead and signed it, followed by a blind signing. In this, no one can assure if what is shown on the screen is the ledger showing you or something else. The final authentication was from the Liminal site, which is run by bots after calculating and clearing all the security instructions.

This blind signing is the point where the attack originated and the Liminal authentication team left it unidentified.

WazirX Applied For a Moratorium In Singapore

On August 27, the Zettai team applied for the 6-month Moratorium application in Singapore. They explained how this Moratorium, or any other filings like restructuring or Scheme, is not solvency or bankruptcy-related. Instead, this is an appeal for protection from legal issues to let them breathe and restructure their proposals.

They have asked the Singapore High Court for some time to get their funds back, per the WazirX townhall meeting. However, this Moratorium is under review and has provided 30 days of protection to the management from any legal obligation. It was effectively implemented on August 27, and these representatives have asked for the creditor’s support as the moratorium is in their favor.

The team is also proposing a restructuring of the crypto balances under the Singapore Scheme of Arrangement (Scheme.)

Restructuring of The Crypto Balances

WazirX opened in 2018 and was taken over by Zettai after Binance confiscated their funds, has been through a crypto hack, losing a major portion of its crypto assets. And now, fifteen days after the hack, the team has presented important plans for restructuring the crypto balance, which is being conducted in Singapore under a scheme of arrangements.

The WazirX townhall meeting hosts explained that Zettai has applied for restructuring of crypto balances under a Scheme of Arrangements. More importantly, they are working on the quickest way to achieve a resolution here. However, despite that, it will take at least six months to solve the issues.

Under this proposed restructuring, platform users with crypto balances will be contingent unsecured creditors of Zettai who can vote on the restructuring of the scheme.

How Will Recovery Take Place?

During the WazirX townhall meeting, Jason revealed the plans to distribute the remaining token (post-hack) in a pro-rata, equitable way. More importantly, this distribution will be in the crypto, not fiat. He also presented their plans to make the recoveries on the platform, starting with involving the investors and potential white knights who can provide them with some capital while they look for future collaboration and partnerships.

Lastly, they will work on revenue-generating products and mechanisms to gain more profit. The users will receive these profits to assist in their asset recoveries. Thirdly, they are continuously attempting to recover the stolen funds.

Crypto Balance Are On Hold On WazirX Until A Solution is Found

Nischal, the Zeitti CEO, revealed that the INR withdrawals are now available on the exchange. It is because the WazirX hack did not impact INR funds. As a result, the users can withdraw around 66% of the INR holding as 34% of the funds are frozen due to some ongoing disputes and investigations by Indian law enforcement agencies (LEAs).

However, these INR withdrawals will take place in two phases. The first phase will run between August 26 to September 8, where the user can withdraw half of the 66% limit of their funds. However, the second phase will begin after September 9, when the users can withdraw all 66% of their INR balance. However, the conditions are not the same with crypto balances.

What’s The Status of Stolen Crypto Funds?

The WazirX townhall meeting revealed that the team has reached out to over 500 crypto exchanges to block some of the identified wallet addresses used in the hack. More importantly, some of the funds are traced on third-party exchanges and are in the process of freezing.

The team has already registered an FIR in India and is coordinating with the cyber attacks crime team in India and Singapore. The team revealed how tracking the stolen funds is their main priority.

However, they also disclosed that they are trying to recover as much as they can, but no promises can be made on how much they will succeed.

Concluding The WazirX Townhall Meeting

The WazirX townhall meeting finished after revealing many significant details to the users. As per the meeting, the team has connected with more than 500 exchanges to block any trades from some of the identified crypto wallets. Additionally, they have filed for a moratorium in Singapore to get some time to work on their restructuring plans. The WazirX townhall meeting also revealed how the platform is not responsible for the WazirX hack. However, an update is still pending from Liminal, the third-party wallet security provider.