CoinSwitch claims despite repeated attempts to reach a resolution with WazirX, they have been unable to recover the trapped funds.
Rival exchange CoinSwitch is taking legal action to recover over $9 million in funds that were trapped while Indian cryptocurrency exchange WazirX is still reeling from the massive $230 million hack.
CoinSwitch, which operates an exchange aggregator, posted on X that it has substantial assets stuck on WazirX’s platform, including fiat currency, ERC20 tokens, and other cryptocurrencies. CoinSwitch has made several attempts to resolve the matter with WazirX, but has not been successful in freeing the funds that are stuck.
The exchange also disclosed that less than 1% of its total assets are directly impacted by the compromised funds, which make up a small portion of the total. CoinSwitch is using its own treasury reserves to maintain a 1:1 ratio for user holdings and to guarantee the stability of its platform. CoinSwitch posted:
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.
A note on CoinSwitch funds on WazirX – a thread🧵 pic.twitter.com/lnckwSnnPA
— CoinSwitch: India's Simplest Crypto App 🚀 (@CoinSwitch) August 28, 2024
Soon after the lawsuit was made public, Nischal Shetty, the founder and CEO of WazirX, retaliated against CoinSwitch on social media. Shetty wrote on X that they “will treat all users fairly – large or small, no side deals.”
Here’s the thing, we will treat all users fairly.
— Nischal (Shardeum) 🔼 (@NischalShetty) August 28, 2024
Large or small, no side deal. If that means legal actions, so be it.
Fairness to all ❤️🙏💪
WazirX Files for Moratorium in Singapore High Court Under Insolvency Act
WazirX also announced that its parent company Zettai has filed an application with the High Court of Singapore for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate its intention to restructure its liabilities under a scheme of arrangement.
A legally-mandated pause in the ability to pursue debt collection from the company is known as a moratorium. This pause in business protects the debtor while a recovery plan is agreed upon and put in place.