Crypto exchange WazirX faces cyber threats, announces partial INR withdrawals starting from August 26

Cryptocurrency exchange WazirX has announced that it will allow INR balance withdrawals from its platform starting August 26. However, as per an official announcement on August 23, customers will only be able to access 66 percent of their funds.

As part of this update, WazirX is also reducing INR withdrawal fees by 60 percent, lowering the charge from ₹25 to ₹10. Meanwhile, withdrawals of cryptocurrencies remain on hold due to the exchange's insufficient token assets to cover all liabilities following the theft.

This announcement comes about a month after WazirX was targeted in a cyberattack that compromised one of its multisig wallets holding $230 million in crypto assets, representing nearly 45 percent of the exchange's total holdings.

"While the operating entity for INR-related activities, Zanmai Labs Pvt Ltd ('Zanmai'), on the WazirX platform was not affected by the cyberattack and has sufficient INR reserves to cover all INR user balances, not all of these balances are currently available for withdrawal," the exchange explained in a blog post.

The exchange further clarified, "Due to ongoing disputes and certain investigations by various law enforcement agencies ('LEAs'), which it is assisting with (and is not a target of), approximately 34 percent of INR balances are currently frozen and are not immediately available for withdrawal."

WazirX's restructuring plans

WazirX also revealed plans to file an application with the High Court of Singapore to seek approval for a "Scheme of Arrangement" aimed at restructuring its debts and ensuring fair recovery for creditors. This legal mechanism would allow the company to propose a debt restructuring plan that could deliver better outcomes for creditors compared to liquidation, subject to creditor approval and court sanction.

"Concurrently, INR withdrawals will be made available in phases. We will be providing users with further updates in the coming days," the exchange stated.

WazirX emphasized, "We have decided to pursue a Singapore Scheme of Arrangement to facilitate an equitable and user-approved distribution of cryptocurrency assets. A Scheme is a necessary step to ensure that users of the platform are treated fairly and in line with user preferences so that the outcome remains legally binding on all relevant parties."