Just-In: WazirX to Resume INR Withdrawals Next Week After Hack

WazirX, one of India’s largest crypto exchanges, has provided a crucial update on the status of user withdrawals. It also outlined the next steps in tackling the hack fiasco. The July 18 attack, which saw hackers make off with $230 million worth of ERC-20 tokens, had forced the platform to suspend withdrawals and trading. However, the exchange will resume withdrawals next week, according to a latest release.

WazirX Hack Update: INR Withdrawals Resuming Next Week

In a move that will likely bring some relief to its users after the WazirX hack saga, the exchange has decided to resume INR withdrawals, which have been frozen since the cyberattack. The platform has announced that starting from August 26, 2024, it will begin to lift the suspension on INR withdrawals in a phased manner.

This decision comes after a careful assessment of user feedback and the current situation. WazirX has assured its users that the INR reserves, managed by Zanmai Labs Pvt Ltd, remain secure.

However, the Indian crypto exchange has clarified that not all INR balances are currently available for withdrawal. Approximately 34% of these balances have been frozen by law enforcement agencies (LEAs) due to ongoing investigations into third-party entities.

These frozen funds are not linked to any wrongdoing by Zanmai Labs, which the exchange emphasizes is not a target of these investigations. To manage the withdrawal process effectively, it has outlined a phased approach:

• From August 26 to September 8, 2024: Users will be able to withdraw up to half of the available 66% of their INR balances.
• From September 9 to September 22, 2024: Users will be able to withdraw the full 66% of their INR balances.

In addition to this phased withdrawal plan, WazirX has announced a reduction in withdrawal fees by 60%. This brings the fee down from INR 25 to INR 10. This fee reduction is intended to ease the withdrawal process for users as they regain access to their funds.

Will Exchange Open Crypto Withdrawals?

Additionally, WazirX has acknowledged the severity of the situation due to challenges around crypto withdrawals. The platform $230 million of ERC-20 tokens, there are now insufficient token assets available to fulfill the user liabilities. However, the exchange still seeks to choose the best possible resolution for its users.

To address this, WazirX announced its decision to pursue a Scheme of Arrangement in Singapore. For further context, it’s a legal process that will allow the company to propose a restructuring plan to users. This plan aims to distribute the remaining crypto assets equitably among users in a manner that is legally binding and agreed upon by the majority.

The Scheme of Arrangement is expected to be a critical step in ensuring that all users are treated fairly. Under this process, users will be required to vote on the proposed restructuring. Moreover, the proposal will only become effective if it receives the requisite level of approval.

WazirX has committed to keeping its users informed throughout this process. Hence, it will use polls and town halls to understand user opinions. This will ensure that the restructuring plan aligns with user preferences. Furthermore, it will soon file an application in the High Court of Singapore to initiate the Scheme of Arrangement.

This move will provide the necessary legal framework and time to implement the proposed restructuring. Additionally, this legal step is seen as essential to offering the platform the “breathing space” it needs to devise a solution that is both fair and acceptable to its user base.