According to CoinSwitch co-founder and CEO Ashish Singhal, WazirX, the country’s biggest cryptocurrency exchange, moved $73.63 million in user assets to international exchanges Bybit and KuCoin in a recent development in the Indian cryptocurrency sector. This move comes after WazirX’s multisig wallets were the subject of a $230 million hack in July 2024, which caused the exchange to lose about 45% of its holdings.
Singhal claims that his team discovered $72.13 million in cryptocurrency assets being transferred from WazirX to Bybit and $1.5 million to KuCoin. Singhal’s disclosure, which he made in an October 21 post on X (previously Twitter), raises serious concerns regarding WazirX’s handling of the matter and platform security.
The Impact of the July 2024 Cyberattack on WazirX
WazirX, which serves 33% of India’s crypto users, faced one of its biggest security breaches in July 2024, when hackers gained access to its multisig wallets, stealing a substantial portion of its digital assets. The attack rattled the Indian crypto market, raising concerns over the safety of funds on exchanges.
Following the hack, WazirX made efforts to recover and secure the remaining funds, resulting in the significant transfers highlighted by CoinSwitch. However, the management of the incident has raised several questions from both users and industry experts.
CoinSwitch’s Role in Tracking the Transfers
In response to the attack and the subsequent transfers, CoinSwitch, a rival Indian crypto exchange, stepped up by developing a user-friendly dashboard to help affected WazirX users track their crypto assets. Singhal emphasized that many WazirX users were confused and struggling to track their funds, especially after a Singapore court ordered WazirX to disclose wallet addresses for around 240,000 accounts.
“We created this dashboard to make it easier for users to sift through these wallet addresses. With the legal proceedings ongoing, we’re limited in what we can share, but we hope this tool will provide some help to the wider crypto community,” Singhal stated.
Credits: Inshorts
The dashboard enables users to input the wallet addresses provided by WazirX and monitor where their funds are located. Singhal believes that creating transparency around wallet addresses and crypto holdings is critical during times of crisis, such as after the WazirX hack.
CoinSwitch Pursues Legal Action
In addition to providing tools for the public, CoinSwitch is also pursuing legal action against WazirX to recover some of its own funds that were caught up in the cyberattack. CoinSwitch claims that 2% of its funds, including Rs 12.4 crore in INR, Rs 28.7 crore in ERC20 tokens, and Rs 39.9 crore in other cryptocurrencies, remain stuck on WazirX’s platform.
The legal proceedings could have broader implications for how crypto exchanges in India handle security breaches, user funds, and transparency in the wake of a hack.
WazirX Responds to CoinSwitch’s Claims
Reacting to the dashboard unveiled by CoinSwitch, a WazirX spokesperson fired back, criticizing CoinSwitch for not providing its own real-time proof of reserves (POR). “Their users have been asking for CoinSwitch’s real-time proof of reserve and all wallet addresses, but they have not provided anything,” the spokesperson said.
WazirX also claimed that it has been actively tracking real-time wallets on its platform and accused CoinSwitch of failing to meet its own transparency standards. “We would request CoinSwitch to first fix their own POR, make it real time, and share all of their wallet addresses along with a dashboard to make it easy for their customers,” WazirX added.
A Battle for Transparency?
The public dispute between two of the biggest cryptocurrency exchanges in India serves as a reminder of the industry’s increasing need for accountability and transparency. Users are increasingly demanding stronger proof of reserve procedures and methods to track their money, particularly those who lost money as a result of hacks.
Although CoinSwitch has taken the initial step by offering a dashboard for tracking WazirX money, the dispute over the proof of reserves on both platforms highlights the difficulties in preserving confidence in the cryptocurrency space.
