WazirX to resume withdrawals on Monday

Indian exchange WazirX released a statement in which it scheduled the return of fiat currency withdrawals for Monday (26). As a result, those whose balances were blocked due to the attack suffered by the exchange in July will be able to withdraw funds from the platform.

As reported by Todaysgist, the attack caused the theft of US$230 million in ERC-20 tokens, forcing WazirX to suspend withdrawals and trading.

However, even with the return of withdrawals, the exchange admitted that it has not yet been able to recover all the stolen cryptocurrency funds. Therefore, there is still no forecast for the return of these withdrawals.

Withdrawals resume on Monday

In a move that will likely bring some relief to its users after the attacks, the exchange has decided to resume fiat currency (Indian rupee) withdrawals, which had been frozen since the attack. The platform announced that, starting August 26, 2024, withdrawals will gradually resume.

This decision comes after careful consideration of user feedback and the current situation. WazirX has assured its users that rupee reserves, managed by Zanmai Labs Pvt Ltd, remain safe.

However, WazirX clarified that not all balances are available for withdrawal at the moment. According to a survey, around 34% of these balances have been frozen by law enforcement agencies (LEAs) due to ongoing investigations into third-party entities.

In other words, only 66% of customers’ balances will be available for withdrawal. Between August 26 and September 8, users will be able to withdraw up to half of the available 66% of their balances. Then, between September 9 and September 22, users will be able to withdraw the full 66% of their INR balances.

In addition to this phased withdrawal plan, WazirX has announced a 60% reduction in withdrawal fees, aiming to make the withdrawal process easier for users.

Will there be enough for everyone?

Furthermore, WazirX acknowledged the gravity of the situation and the challenges surrounding cryptocurrency withdrawals. The platform lost $230 million worth of ERC-20 tokens and admitted that there are not enough token assets available to clear all withdrawals.

To address this, WazirX has announced its decision to seek a Scheme of Arrangement in Singapore. This is a legal process that will allow the company to propose a restructuring plan to users.

In this plan, the company audits how much cryptocurrency it still has and proposes to distribute this balance equally to all affected customers. This will not compensate for all amounts owed, but it will help to mitigate losses.

The Scheme of Arrangement is expected to be a critical step in ensuring that all users are treated fairly. To achieve this, WazirX’s creditors would need to vote for or against the proposal. WazirX has committed to keeping its users informed throughout this process.

This measure will provide the necessary legal framework and time to implement the proposed restructuring. Furthermore, this legal step is seen as essential to give the platform the “breathing space” it needs to craft a solution that is fair and acceptable to its user base.

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