WazirX CEO Urges Users to Withdraw Funds Amid Uncertainty Over Full Recovery
In Singapore, Zettai Partners with Financial Restructuring Firm Kroll to Aid WazirX’s Recovery
On Monday, September 2, WazirX co-founder Nischal Shetty addressed concerns regarding user funds in a virtual townhall meeting with the media. Shetty revealed that users in urgent need of their funds have started withdrawing their Indian Rupee (INR) balances from the platform. This followed the partial unfreezing of INR balances on August 26, which initially led to a surge in withdrawals. However, the pace of withdrawals has since slowed. The WazirX team is now advising users to withdraw their INR balances while ongoing financial restructuring efforts are in progress.
The situation stems from a significant security breach on July 18, when a multi-signature wallet under the oversight of Liminal Custody was hacked. The breach resulted in a staggering loss of over $230 million (approximately Rs. 1,900 crore). This incident not only affected the financial stability of WazirX but also led to the suspension of trading, withdrawals, and deposit services on the platform. The platform’s users have been grappling with the impact, and currently, 34 percent of users’ INR funds remain frozen as investigations continue.
In the wake of the hack, WazirX has been working with financial restructuring firm Kroll, which was recently engaged to help get the platform’s finances back on track. The partnership with Kroll is part of a broader effort to stabilize the situation and recover from the financial fallout of the security breach.
During the townhall, Shetty addressed common user concerns, emphasizing the need for immediate action. “People have been asking us whether they should withdraw their funds or keep them in the platform. Our recommendation for now is to withdraw your funds. Once we resume normal operations, you can always deposit again,” Shetty stated. This advice comes as part of WazirX’s ongoing efforts to mitigate the impact of the breach and restore user confidence.
Despite the challenges, the WazirX team remains committed to resolving the issues and resuming full operations as soon as possible. The platform’s priority is to ensure the security of user funds and to restore the services that have been temporarily suspended. The involvement of Kroll is expected to play a crucial role in this recovery process, aiding in both the financial restructuring and the implementation of enhanced security measures.
As the situation evolves, WazirX continues to communicate with its users and provide updates on the progress of the recovery efforts. The goal is to navigate through the current crisis and emerge with a more secure and reliable platform for its users.
