WazirX Scrutiny Grows: User Access Issues

• WazirX faces growing scrutiny due to ongoing issues affecting user access to their funds.
• Users are unable to withdraw or trade their assets despite the recent hack.
• Competitor CoinSwitch has also been impacted, with millions of dollars in assets stuck on WazirX.

Indian crypto exchange WazirX has been under fire due to ongoing issues affecting users’ difficulties to access their assets. Pushpendra Singh, founder of PushpendraTech and SmartViewAi, have publicly voiced concerns on the situation, stressing on the urgency.

He stressed the severity of the situation, noting that people’s funds are frozen, preventing them from trading or withdrawing even though the assets weren’t stolen in the hack. Singh urged all parties involved to prioritize users’ well-being over legal battles. He called for the release of funds and a collaborative solution that addresses users’ collective pain.

On August 28, 2024, CoinSwitch, a competitor of WazirX, alleged that it had significant funds stuck on the WazirX platform following the high-profile hack in July. This development comes as WazirX recently filed for a 30-day moratorium with Singapore’s High Court. 

The exchange is seeking temporary relief to manage its financial difficulties during restructuring. If approved, the moratorium would temporarily suspend certain legal activities, giving WazirX time to address user balances and facilitate recovery efforts. However, a court date for the moratorium request hasn’t been set yet.

CoinSwitch claims approximately $9.7 million of its assets are currently frozen on WazirX. This includes $1.5 million in INR, $3.4 million in ERC-20 tokens, and $4.75 million in other digital assets, representing roughly 2% of CoinSwitch’s total holdings.

Despite repeated attempts to contact WazirX, CoinSwitch says it hasn’t reached a satisfactory resolution. In response, CoinSwitch has used its own funds to maintain a 1:1 ratio for user holdings on its platform, essentially holding reserves 1.5 times the value of user investments.

Following the hack, WazirX suspended all withdrawals, leading to widespread user fear and frustration. However, the exchange resumed partial withdrawals on August 26, allowing users to access up to 66% of their balances.