WazirX Announces Partial INR Withdrawals Amid Ongoing Challenges
In a significant development for its users, WazirX, one of India’s leading cryptocurrency exchanges, has announced that it will begin allowing partial withdrawals of Indian Rupee (INR) balances starting August 26. This announcement, made on August 23, comes in the wake of a tumultuous period for the exchange, which has faced substantial challenges following a recent cyberattack.
Partial Withdrawals: What Users Need to Know
Beginning August 26, WazirX users will be able to withdraw up to 66 percent of their INR balances. This move is aimed at providing some liquidity to users who have been unable to access their funds for an extended period. However, it is important to note that the remaining 34 percent of the INR balances will remain frozen. This restriction is due to ongoing disputes and investigations by various law enforcement agencies, which have led to a temporary halt in the availability of these funds.
Reduced Withdrawal Fees: A Silver Lining
In conjunction with the announcement of partial withdrawals, WazirX has also reduced its INR withdrawal fees by a substantial 60 percent. The fee has been lowered from ₹25 to ₹10, making it more affordable for users to access their funds. This reduction in fees is a welcome change for many users who have faced financial strain due to the inability to withdraw their assets.
The Impact of the Cyberattack
The backdrop to these developments is a significant cyberattack that occurred about a month ago, which compromised one of WazirX’s multisig wallets. This attack resulted in the loss of approximately $230 million in crypto assets, accounting for nearly 45 percent of the exchange’s total holdings. As a result, cryptocurrency withdrawals remain on hold, as WazirX currently lacks sufficient token assets to cover all liabilities.
In a blog post, WazirX clarified that its operating entity for INR-related activities, Zanmai Labs Pvt Ltd, was not affected by the cyberattack and has adequate INR reserves to cover all user balances. However, the ongoing investigations have led to a freeze on a significant portion of these balances, leaving many users in a state of uncertainty.
Legal Measures: Seeking a Scheme of Arrangement
To navigate the aftermath of the cyberattack and the associated financial challenges, WazirX has announced plans to file an application with the High Court of Singapore for a "Scheme of Arrangement." This legal mechanism is designed to restructure the exchange’s debts and ensure a fair recovery for creditors. WazirX believes that this approach could yield better outcomes for creditors compared to liquidation, pending approval from creditors and the court.
The exchange has emphasized that pursuing a Singapore Scheme of Arrangement is a necessary step to ensure equitable treatment for all users and to create a legally binding outcome for all parties involved. This proactive approach reflects WazirX’s commitment to addressing the challenges it faces while prioritizing the interests of its users.
Moving Forward: Phased Withdrawals and Ongoing Updates
WazirX has assured its users that INR withdrawals will be made available in phases, with further updates expected in the coming days. The exchange is committed to keeping its users informed as it navigates this complex situation. By taking these steps, WazirX aims to restore user confidence and provide a pathway for users to access their funds.
In conclusion, while the announcement of partial INR withdrawals is a positive step for WazirX users, the exchange continues to grapple with the repercussions of a significant cyberattack. The ongoing investigations and legal measures underscore the complexities of the situation, but WazirX’s commitment to transparency and user support remains steadfast. As the exchange works through these challenges, users are encouraged to stay informed and engaged with the latest updates from WazirX.