After losing 45% user funds worth Rs 2000 crore in a massive cyber hack, the WazirX exchange has transferred $72.13 Million or Rs 606 crore worth of remaining user funds to ByBit, a Chinese owned exchange that is unregistered in India.
Moreover, the user policy of ByBit states clearly that the exchange will not be liable for any compensation to users for events beyond their control that include cyber hacking.
ByBit is a crypto exchange headquartered in Singapore with Chinese entrepreneur Ben Zhou as its chief executive officer and co-founder. The exchange is not registered with the Financial Intelligence Unit (FIU)- India and is not allowed to do business in the country.
In other words, Rs 606 crore worth of cryptocurrencies, that form part of remaining 55% user funds of WazirX, is now stored in an exchange that will again be out of reach of Indian users in the case of another unforeseen cyber hack.
The information about WazirX transferring $72.13 Million worth of crypto funds to ByBit was revealed by CoinSwitch CEO Ashish Singhal in a statement on Monday. Singhal also provided a live dashboard to all users to check over 240,000 public wallet addresses revealed by WazirX exchange a few days ago, acting on the orders of the Singapore Court.
According to Singhal, an internal audit by the CoinSwitch team had revealed that WazirX transferred $72.13 Million to ByBit and $1.5 Million to Kucoin after the hack, without the permission of users. While Kucoin is FIU-India registered, Bybit is not, which makes it vulnerable for users to have their funds stored in the exchange.
According to an industry insider, WazirX management is having trouble finding an exchange registered with FIU in India, to serve as a third party and keep their user funds till they announce a restructuring scheme for the users.
What does ByBit User Policy Say?
ByBit was launched in 2018 by Ben Zhou, a Chinese national, who first registered it under ByBit Fintech in Singapore. The exchange saw sporadic rise after the collapse of FTX and currently has over 50 Million users, with primary share in European nations.
A close examination of the user policy of ByBit states that they will not hold any liability towards users in the case of events that are beyond their control that includes cyber hack. The ByBit policy also states that they have set a liability sum to 10,000 USD only.
Moreover, as per ByBit, it has three regulators- Virtual Assets Regulatory Authority Dubai, The Cyprus Securities and Exchange Commission and Astana Financial Services Authority, Kazakhstan.
The WazirX exchange has again tried to allegedly gamble with the funds of its 4.4 million users in India by choosing a platform that is unregistered in India.
Also Read: WazirX Submitted Dubious Wallet Addresses to Singapore Court; Here’s Proof
