WazirX to Begin Indian Rupee Withdrawals, But Keep Users’ Crypto Frozen After Hack

WazirX will let users withdraw up to two-thirds of their Indian rupees (INR) from its platform beginning Monday, roughly one month after the Indian crypto exchange sustained losses worth $230 million in a hack. 

The exchange is allowing users to take out up to 66% of the INR in their accounts, the company said in a statement. Meanwhile, crypto withdrawals remain paused for the foreseeable future, according to the exchange, due to its losses sustained across Ethereum tokens and other assets.

“Due to the cyberattack and loss of a significant balance of ERC-20 tokens as a result of the theft, there are insufficient token assets available to meet the liabilities arising from the token balances owing to users of the platform,” WazirX said Friday.

The unfreezing of withdrawals comes after WazirX said on Wednesday that it had canceled all outstanding open orders on its platform in a bid to resolve issues with its users’ account balances following a hack on its platform last month.

WazirX froze both crypto and INR withdrawals shortly after hackers stole $230 million from its platform on July 18. Google cybersecurity subsidiary Mandiant assessed that the hackers did not breach WazirX’s laptops, fueling speculation that hackers conducted the cyberattack by exploiting WazirX’s multi-party computation wallet.

The exchange plans to open up withdrawals in stages: Users will be able to take out roughly half of their INR from August 26 to September 8. Then, the exchange will enable them to withdraw the remainder of their rupees—up to 66% of the total INR in their accounts—between September 9 and 22.

As part of the phased withdrawal resumption, WazirX has reduced its withdrawal fees from Rs 25 to Rs 10. Still, roughly one-third of users’ rupees must remain on WazirX due to “ongoing disputes, and certain investigations by various law enforcement agencies,” the exchange said Friday.

It is unclear which law enforcement agencies are investigating matters relating to WazirX and the exploit it suffered. The timing of the unfreezing of users’ cryptocurrencies and the remainder of their rupees on WazirX also remains unclear.

WazirX did not immediately respond to Decrypt’s request for comment.

WazirX revealed on Friday that it is pursuing a Singapore Scheme of Arrangement, a kind of legal process that will “facilitate an equitable and user-approved distribution of cryptocurrency assets.”

As part of that process, users will be able to vote on and approve any restructuring proposal before it becomes effective. However, the exchange and its advisors will largely drive the initiative, according to WazirX’s statement. It is currently unknown when a community vote on the matter could take place.

Edited by Andrew Hayward