WazirX Opens INR Balance Withdrawals, Users Can Access 66 Percent of Funds

Indian crypto exchange WazirX, that was hacked for over $230 million (roughly Rs. 1,928 crore) on July 18, is moving ahead with resuming some services on its platform after more than a month of suspension. In a statement released over the weekend, the exchange said it was resuming INR withdrawals starting Monday, August 26. WazirX customers, however, will only be able to access and withdraw 66 percent of their funds, while the remaining 34 percent will remain frozen due to ongoing investigations into the incident.

Let's Dive Into WazirX's Plan

In its statement, WazirX said that between August 26 and September 8, users will be able to withdraw up to half of the 66 percent limit of their INR balances. Between September 9 and September 22, users can withdraw up to the full 66 percent limit of their INR balances.

“While the operating entity for INR-related activities, Zanmai Labs Pvt Ltd, 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. Due to ongoing disputes, and certain investigations by various law enforcement agencies (LEAs) which is assisting with (and it is not a target of such investigations), ~34 percent of INR balances are currently frozen and are not immediately available for withdrawal,” the company said.

Upon the investigation's completion, the exchange claimed it will release the frozen INR balances too. For now, the timeline for the same remains unclear.

Meanwhile, the withdrawals of crypto balances on WazirX remains suspended as the company claims it has lost a significant balance of ERC-20 tokens as a result of the hack. This has left the reserves of the exchange with insufficient token assets that could meet the liabilities.

WazirX claims to be serving over 16 million users. In the last month, multiple WazirX users have posted about facing financial struggles because of the suspension of its services.

While INR withdrawals on WazirX are now allowed, some users haven't yet been able to access their funds. Screenshots shared by users show that they can withdraw a minimum amount of Rs. 100 and a maximum of Rs. 1 lakh per transaction. A user will only be able to withdraw Rs. 5 lakh per day for Rs. 25 levied as platform fee per transaction.

WazirX has not yet reacted to these grievances.

What's Next for WazirX?

The exchange is planning to file an application in the High Court of Singapore in the coming days, aiming to pursue a financial restructuring under a Scheme of Arrangement.

WazirX or Zenmai – registered in India – has a counterpart in Singapore that goes by the name Zettai Pvt Ltd Singapore, that is reportedly the majority owner of WazirX's split ownership with Nischal Shetty, Siddharth Menon, and Sameer Mhatre.

Explaining the Singapore Scheme of Arrangement, the exchange said it is a “corporate rescue and restructuring mechanism set out under the Insolvency, Restructuring and Dissolution Act (2018, “IRDA”) of the Singapore regulatory framework.”

This scheme will aim to put forward a proposal to the creditors of WazirX to restructure its debts and deliver stronger recoveries to creditors than under a liquidation subject.

“A creditor-approved and Court-sanctioned Scheme will be legally binding on both the company and its creditors, and the IRDA sets out clear timelines, requirements and Court processes to ensure that creditors have enough information to make an informed decision on the proposed terms,” the exchange noted.

Meanwhile, for now it seems, WazirX has ditched its previous 55/45 approach, under which the exchange had said that users with 100 percent of their tokens in the ‘not stolen' category were to receive 55 percent of those tokens back while the the remaining 45 percent of funds would be converted to a USDT-equivalent token and locked.