CoinSwitch sues WazirX to recover Rs 81 crore in trapped funds

CoinSwitch, the crypto exchange aggregating platform from India, has filed a legal case against WazirX to recover funds that it held in WazirX wallets before the $240 million hack. 

According to the platform, two per cent of its funds are stuck with WazirX which includes Rs 12.4 crore in INR, Rs 28.7 crore in ERC20 tokens, and Rs 39.9 crore in other tokens. 

“This amounts to about 2 per cent of all funds of CoinSwitch. According to the WazirX claim, only ERC20 tokens were impacted in the alleged cyber attack. That translates to less than 1 per cent of total CoinSwitch funds,” CoinSwitch wrote in a blog. 

In one of the biggest crypto hacks of recent times, WazirX lost nearly 45 per cent of its total assets caused by a breach in its multi-signature wallet. The platform immediately halted all trading on the platform after confirming the news and yet, no crypto withdrawals on the platform are allowed. 

From August 26, the exchange has partially opened its INR withdrawals for the users.

“From the day of the incident, we have tried to be in constant touch with the WazirX team, seeking recovery of the funds that are stuck on their exchange. However, our efforts have not come to fruition, leaving us with no choice but to pursue legal action to recover the funds,” CoinSwitch said.

However, CoinSwitch ensured its customers that all of their funds are safe with the platform as they maintain at least a 1:1 treasury ratio for every user’s holding. 

“We want to assure that all user funds are safe and secure on CoinSwitch. Given the unprecedented situation, right after the alleged incident, we utilized our own treasury to make sure that we maintain at least a 1:1 ratio for every user’s crypto holding on CoinSwitch.” 

Under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 in Singapore, WazirX’s related entity Zettai Pte has filled for a moratorium to allow the exchange some time to restructure its liabilities.