WazirX users can access 66 percent of their INR funds starting today

Indian crypto exchange WazirX, which was hacked of over $230 million (approximately Rs. 1,928 crore) on July 18, is continuing to resume some services on its platform after over a month of suspension. In a statement released over the weekend, the exchange said it would resume INR withdrawals from Monday, August 26. However, WazirX customers will only be able to access and withdraw 66 percent of their funds, while the remaining 34 percent remains frozen due to ongoing investigations into the incident.

Let’s dive into WazirX’s plan

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

“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 litigation and certain investigations by various law enforcement agencies (LEAs) assisting with (and not being a target of such investigations), ~34 percent of INR balances are currently frozen and not immediately available for withdrawal,” the company said.

After the investigation was completed, the exchange claimed that it would also release the frozen INR balances. The timeline for this is still unclear.

Meanwhile, withdrawals of crypto balances on WazirX remain suspended, as the company claims it lost a significant balance of ERC-20 tokens as a result of the hack, leaving the exchange’s reserves with insufficient token assets to meet its obligations.

WazirX claims to serve over 16 million users. In the past month, several WazirX users have posted about their financial problems due to the suspension of services.

Although INR withdrawals are now allowed on WazirX, some users have not been able to access their funds yet. 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 can withdraw only Rs. 5 lakh per day for Rs. 25 charged as platform charges per transaction.

WazirX has not yet responded to these complaints.

What’s next for WazirX?

The exchange plans to file an application with the Singapore High Court soon, seeking a financial restructuring under a so-called Scheme of Arrangement.

WazirX or Zenmai – registered in India – has a counterpart in Singapore which goes by the name Zettai Pvt Ltd Singapore, i.e. reportedly WazirX’s majority shareholder split ownership with Nischal Shetty, Siddharth Menon and Sameer Mhatre.

The exchange explained in its explanation of the Singapore Scheme of Arrangement that it is a “business rescue and restructuring mechanism provided for in the Insolvency, Restructuring and Dissolution Act (2018, “IRDA”) of the Singapore regulatory framework.”

This scheme aims to provide WazirX’s creditors with a proposal to restructure their debts and offer them stronger claims than under a liquidation scheme.

“A creditor-approved and court-sanctioned arrangement will be legally binding on both the company and its creditors, and IRDA sets out clear timelines, requirements and legal procedures to ensure that creditors have sufficient information to make an informed decision on the proposed terms,” the exchange said.

Meanwhile, it appears that WazirX has ditched its previous 55/45 approach. Under this approach, the exchange stated that users with 100 percent of their tokens in the “not stolen” category would get 55 percent of those tokens back, while the remaining 45 percent of funds would be converted into a USDT-equivalent token and locked.