After the major WazirX crypto hack, the exchange claimed on Thursday that they would restore the balances of all accounts and reverse all trades conducted on their platform since the suspension of withdrawals. The announcement comes in the wake of a petition filed against the exchange in a tribunal court in India.
In their communication, WazirX explained the reopening of withdrawals as “constrained,” citing “feedback from numerous users” as the reason for this decision.
However, many sceptics believe that WazirX was compelled/forced to take this action following a fraud petition filed against its parent company, Zanmai Labs, and its founders with the National Company Law Tribunal (NCLT) on August 5.
Summary of Fraud Petition Against WazirX & Its Founder
A scam petition has been filed against WazirX, India’s largest crypto exchange, in the National Company Law Tribunal (NCLT) Indore, after a theft of a whopping $230 million in crypto assets. The petition was filed by Gauransh Vyas, a law student from Indore, on August 5, 2024. His LinkedIn profile shows that he is a legal intern with the Supreme Court of India.
The plea invokes Sections 213(b) and 221 of the Companies Act, 2013, which allow for an investigation into the company’s operation if there is suspicion of mismanagement or fraud and the freezing of the company’s assets during the inquiry. The respondents named in the petition include:
- Zanmai Labs Private Limited,
- Gauransh Vyas,
- Liminal Custody Through Its Director Mahin Gupta
- First Answer India Technologies Private Limited
- Codigami Technologies Private Limited
- Crowdfire India Private Limited
- Shibuya Labs Llp
- Qizil21 Softwares Private Limited
- Frabaer Labs Private Limited, Sameer Hanuman Mhatre
- Nischal Shetty
- Ministry Of Home Affairs Through Principal Secretary
- Ministry Of Finance Through Principal Secretary
- Tushar Laljibhai Patel and Muthuswamy Nagarajan Iyer
- Ministry Of Corporate Affairs Through Principal Secretary
- Serious Fraud Investigation Office
WazirX has acknowledged the petition and stated that they are taking necessary legal action while denying any fraudulent activities. They filed a First Information Report (FIR) regarding the hack and are collaborating with law enforcement agencies for the investigation.
WazirX spokesperson reverted to the query on this matter, “We are aware of the petition filed against us before the NCLT, Indore and we are taking necessary legal action. We strongly deny any and all allegations of fraud.”
The spokesperson added further, “We will respond as per the prescribed procedure under law before the NCLT. The NCLT will decide the weight of the petition on legal grounds.”
WazirX Announces Balances Restored, Withdrawals Still Closed
On August 8, WazirX announced a major update regarding the recent platform issues after the cyberattack on July 18, 2024. In response to user feedback and to ensure equitable treatment for all, WazirX has decided to restore the balances of all accounts and undo all trades carried out on the platform after 1 PM IST on July 18, 2024.
However, a lot of people mistook it for the announcement of resuming withdrawal. Please note that withdrawals are not yet open. This restoration should not be mistaken for the reopening of withdrawals. Trading and withdrawals remain halted during this process.
Here are the Key Points of the Announcement:
- Balance Restoration: All users’ portfolio balances on the WazirX platform will be restored to what they were at 1 PM IST on July 18, 2024. This process will be completed over the next few days, and affected users will receive an email notification detailing any affected trades.
- Trade Reversal: All trades executed after the specified time will be undone, and any associated fees and referrals will be reversed.
- Impact on Transactions: All ongoing or pending transactions will be cancelled, and portfolios will be restored to their status as of July 18, 2024, 1 PM IST. This applies to both INR and crypto balances. Also, TDS linked with the affected trades will be credited back to affected users.
However, no specific date was mentioned in the announcement when this clause will be implemented. Users will be notified via email about the restoration and can verify affected trades on the WazirX platform.
Final Words
Here note that after a complaint filed by WazirX regarding a cyber attack on their multisig wallet, the Delhi Police have taken swift action. An FIR has been registered under the BNS and IT Act on August 5, 2024, at the PS Special Cell, PS Lodhi Colony, New Delhi. This action was facilitated through the Intelligence Fusion & Strategic Operations (IFSO) unit of the Delhi Police.
As users’ outrage continues to grow, it is crucial for the creators of WazirX to maintain transparency and make collective efforts to recover users’ funds.
Also Read: What Went Wrong with WazirX? Unraveling India’s biggest crypto hack
