WazirX CEO Defends Fund Transfers Amid Accusations of $75 Million Crypto Move to Exchanges

WazirX founder Nischal Shetty has responded to allegations that the company transferred $75 million worth of crypto assets to two major exchanges without informing users.

The situation arose after the Indian crypto platform disclosed more than 240,000 wallet addresses as part of the requirements of a four-month moratorium granted to it by a Singapore court following a $235 million hack in July.

The CoinSwitch Indictment

Unpacking the disclosure in an Oct. 21 post on X, CoinSwitch CEO Ashish Singhal said his team had created a system to make it easier for WazirX users to sift through the voluminous information that had been made available .

He noted that his company’s interest in the matter stems from the fact that it holds Indian rupee and virtual digital assets (VDA) with WazirX. He further stated that when the exchange halted transactions following the alleged hack, CoinSwitch was forced to use funds from its treasury to compensate customers, and is currently taking legal action against the exchange to recover the funds. used in the exercise.

However, Singhal claimed that as his team analyzed the data provided, they discovered that the company had moved a large amount of crypto to several major exchanges after the hacking incident.

According to him, the Mumbai-based crypto company transferred a digital currency worth $72.13 million to Bybit, and another portion valued at $1.5 million goes to KuCoin. What’s more, the team found that of the more than 200,000 addresses it examined, roughly half had balances of less than $10, while nearly 18,000 had nothing.

However, Singhal refrained from sharing more information about the alleged movement of funds, citing his company’s ongoing legal proceedings against the exchange.

Answer by WazirX

A day after the claims, WazirX CEO Nischal Shetty took to social media to give his side of the story. Describing the claims as a “false narrative” and a “coordinated campaign”, Shetty denied that there had been any “secret” movement of funds, as had been widely reported in the press following the CoinSwitch indictment.

According to him, the company moved the assets to the exchanges as part of a legitimate process to bring in a new custodian after splitting from Liminal following the July attack.

He also explained that due to the complexity of escrow, not all escrow providers support certain tokens. As a result, some crypto assets were temporarily moved to exchanges such as Bybit and KuCoin while WazirX explored better custody solutions.

Despite offering a $23 million reward and asking forensic experts and law enforcement for help, the crypto trading site has yet to recover any of the money stolen in the July attack.

And there appears to be little hope of anything recovering, with the exploiter, ostensibly linked to North Korea, having already laundered almost all of its ill-gotten gains.

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