The legal dispute escalated as CoinSwitch filed a lawsuit against WazirX, accusing it of fraud and freezing its assets after a $230 million security breach.
Ashish Singhal, the co-founder of the Indian cryptocurrency exchange CoinSwitch, accused the competing platform WazirX of transferring customer funds totaling $75 million to international exchanges like Bybit and KuCoin.
The cyber attack that took place in July 2024 prompted a complaint against the Indian exchange and increased scrutiny of the exchange’s operations. CoinSwitch announced this by releasing a public dashboard that uses data from the exchange’s disclosures to monitor wallet movements.
Since the incident that occurred on July 18, CoinSwitch has accused WazirX of fraudulently moving about $75 million worth of assets belonging to its users to exchanges such as Bybit and KuCoin without telling its consumers. CoinSwitch has filed a lawsuit against WazirX for freezing its assets following a $230 million breach.
These charges are the most recent in a legal battle that has been going on for quite some time. In an effort to bring attention to this matter and to demonstrate to users the flow of funds, CoinSwitch has introduced a dashboard that monitors the unusual fund transfers that occur on the exchange.
The dashboard not only depicts the asset flow but also prompts inquiries about the organization’s current internal management procedures. The cryptocurrency community also expressed concerns about the exchange’s handling of user funds following the attack.
Following the cyber assault, the exchange is already in a state of disarray as a result of the struggle to get back into business. The two exchanges are involved in a legal dispute over the frozen assets. This is only one of the many difficult challenges that cryptocurrency exchanges confront when it comes to managing the assets of their consumers while also dealing with security breaches.
Radiant Capital is currently collaborating closely with the Federal Bureau of Investigation to recover the stolen fifty million dollars. The incident specifically targeted the hardware wallets of a number of developers by employing sophisticated malware injection.
Aiding WazirX Users with Post-Hack Transparency Tool
While the cryptocurrency landscape in India is still struggling to come to terms with the issue, the purpose of this dashboard is to shed light on wallet operations. The most recent document that WazirX submitted to the High Court of Singapore revealed that the company had disclosed more than 240,000 wallet addresses throughout the extended debt restructuring.
The majority of users, especially in India, where crypto awareness is still developing, need to understand a great deal of information. For the purpose of assisting in the tracking of the transfer of cash from its wallets, CoinSwitch has developed a tracker.
The cyberattack in July 2024 resulted in the transfer of approximately $72.13 million worth of bitcoin to Bybit and an additional $1.5 million to KuCoin. This tracker, according to CoinSwitch, is an important initial step toward uncovering the whole movement of this occurrence, and it will be updated further as additional information is available.
Additionally, Singhal stated that the legal limits remain in effect due to the ongoing nature of these proceedings. This implies that CoinSwitch will face limitations on what it can publicly express. CoinSwitch, he continued, has committed to maintaining transparency throughout the entire process.
He extended an invitation to users to contact the team with specific data requests or to receive customized reports, stating, “We welcome suggestions on how we can serve you better during this period. Approximately 230 million dollars’ worth of assets, principally ERC-20 tokens, that were stored in hot wallets were compromised as a result of this. Because of the security compromise, the exchange placed a stop to all withdrawals. The withdrawals of funds from users were impacted.
Despite this, the company has initiated partial operations for withdrawals of a restricted amount of INR. At this time, cryptocurrency withdrawals are still not possible because the company is working to lower network fees and condense its assets to the bare minimum.
The Singapore High Court granted a moratorium to Zettai Pte Ltd, the parent company of WazirX, in August 2024. The moratorium was applicable for a period of four months. The interim protection plan aimed to assist the exchange in managing its restructuring process and organizing its finances.
However, the ongoing legal battle between the exchange and CoinSwitch over frozen funds worth $9.7 million significantly complicates the recovery procedure. CoinSwitch initiated legal action on the same day that the exchange submitted a request for an extension of the moratorium for a period of thirty days.
Before the attack, CoinSwitch, which had assets deposited with WazirX, used its own treasury to maintain a reserve ratio of one to one and to protect consumers while the dispute persisted.
