In the wake of a significant hack affecting WazirX, a recent webinar hearing on September 25, 2024, provided a platform for users to voice their concerns regarding managing their funds.
The hack, which resulted in the loss of approximately $234 million in user assets, has left many users anxious about the future of their investments and the transparency of the platform’s operations.
During the webinar, there were many users who questioned how user funds were handled and when they could withdraw their remaining balances. Concerns have also been raised about WazirX, Zettai, or Nischal allegedly using 100 crores of user funds for legal processes despite claiming a 1:1 proof of reserves.
A user asked when they could withdraw their remaining funds from WazirX. In response, Wazirx said that withdrawals will only be possible after the restructuring proposal, called a Scheme, is approved by creditors and sanctioned by the High Court of Singapore.
Users are frustrated over his blocked investments after switching platforms and asked when he could access his funds. WazirX clarified that withdrawals will only be allowed after a restructuring plan is approved by creditors and the High Court of Singapore, which could take at least six months. Trading will not resume until this process is complete, but Zettai will facilitate withdrawals according to the approved terms once finalized.
Other side, users also claim that the platform is hiding its financial situation despite having the funds to pay users and they consider other exchanges like BingX have managed similar situations.
However, WazirX noted that as of July 18, 2024, Zettai has $546.5 million in liabilities and an asset deficit of 45%, with assets covering only 55% of these liabilities, mainly owed to customers.
Next, an inquiry about the authorization for using user funds highlighted the ongoing concerns regarding accountability. In response, it was clarified during the restructuring of WazirX that the costs being incurred include operational expenses, legal proceedings, and investigative work to recover stolen assets.
Further, these expenses are necessary to keep the platform running, facilitate the voting process for the restructuring scheme, and improve user recoveries through revenue-generating products. Legal costs are also being incurred to ensure that the restructuring is binding and orderly. Zettai, which manages WazirX, is actively seeking rescue financing from potential partners to cover these costs
One user also questioned WazirX’s ability to control cryptocurrency when users cannot withdraw their funds. It was explained that WazirX operates through Zanmai Labs for INR transactions, while Binance handled crypto operations until January 2023.
After Binance ceased its services, Singapore-based Zettai Pte Ltd took partial control of the crypto assets but does not fully manage deposits and is disputing Binance’s termination.
When the user questioned WazirX’s policy of allowing large withdrawals after a cyberattack while restricting Indian users from withdrawing their crypto. The answer says, “Please note that assets were stolen via a cyberattack, not via a withdrawal from a user.”
