Ashish Singhal, the co-founder of the Indian cryptocurrency exchange CoinSwitch, accused the rival platform WazirX of transferring user assets amounting to $75 million to international exchanges like Bybit and KuCoin.
The accusation against Indian exchange came after the July 2024 cyber attack, when more attention was paid to its actions.
CoinSwitch announced this by releasing a public dashboard to track wallet movements using data from the exchange’s disclosures.
WazirX Under Fire: Did They Transfer User Funds to Bybit and KuCoin?
CoinSwitch accused WazirX of transferring some $75 million in users’ funds to exchanges, such as Bybit and KuCoin, since the July 18 hack without informing its users.
Making sense of WazirX’s wallet disclosure for users
Crypto exchange WazirX — which allegedly faced a cyberattack in July 2024 — has released over 240,000 wallet addresses as part of an affidavit they filed in the High Court of Singapore.
These many wallet addresses can be… pic.twitter.com/QfaEmuQXUZ
— Ashish Singhal (@ashish343) October 21, 2024
The accusations are the latest in a legal tussle that saw CoinSwitch sue WazirX for freezing its assets after the exchange went through a $230 million breach.
CoinSwitch launched a dashboard tracking the exchange’s suspicious fund transfers to raise awareness of this issue and show users the flow of funds.
The dashboard depicts not just the movement of the assets but also questions some of the company’s internal management practices. It also left the crypto community concerned about how the exchange treated user funds post-hack.
The exchange is already reeling from a tussle to get back into business after the cyber attack. The two exchanges are fighting over the frozen assets, and it will face litigation. This is one of the various complex challenges crypto exchanges face in handling users’ funds while facing security breaches.
Just for reminder, one more exchange was recently jacked. It was Radiant Capital, which is now actively collaborating with the FBI to recover the stolen $50 million USD. The incident targeted multiple developers’ hardware wallets using advanced malware injection.
Aiding WazirX Users with Post-Hack Transparency Tool
While India’s crypto landscape still grapples with the situation, this dashboard intends to illuminate wallet activities.
In the prolonged debt restructuring, WazirX exposed over 240,000 wallet addresses in its recent affidavit before the High Court of Singapore. Much information must be clear for most users, especially in India, where crypto understanding is still growing.
CoinSwitch has prepared a tracker to help trace the movement of funds from its wallets. It points out that, after the July 2024 cyberattack, around $72.13 mln of cryptocurrency went to Bybit, and another $1.5 mln went to KuCoin.
CoinSwitch said this tracker is an essential first step toward revealing the entire movement regarding this incident and will be updated further when more information is available.
Singhal also said that since these proceedings remain ongoing, the legal constraints continue to apply. For CoinSwitch, this means a limitation on allowed things to say out publicly. He added that CoinSwitch committed to transparency throughout the process.
He invited users to contact the team for specific data requests or customized reports, stating, “We welcome suggestions on how we can serve you better during this period.”
This compromised around $230 million worth of assets, primarily ERC-20 tokens, that are in hot wallets.
The exchange stopped all withdrawals due to the breach. It affected users’ fund withdrawals. Still, partial operations for very limited INR withdrawals have begun. Crypto withdrawals are still closed while the company consolidates its assets to a minimum and reduces network fees.
CoinSwitch Demands $9.7 Million.
In August 2024, the parent company of WazirX, Zettai Pte Ltd, received a four-month moratorium from the Singapore High Court. The concept of temporary protection was to aid the exchange in sorting out its finances and managing the restructuring process.
But the exchange’s recovery process is even more complicated in the middle of a continuing legal battle with CoinSwitch over frozen funds worth $9.7 million. CoinSwitch filed a lawsuit on the same day that the exchange asked for a 30-day extension on the moratorium.
CoinSwitch, which had assets deposited with WazirX before the attack, used its internal treasury to maintain a 1:1 reserve ratio and ensure customers weren’t affected while the dispute was ongoing.
The post WazirX Accused Of Suspicious Transfers Following July Hack appeared first on CoinGape.
