India-based crypto exchange WazirX announced that it will begin a phased resumption of fiat currency withdrawals on Aug. 26, following a month-long suspension due to a cyberattack, according to an Aug. 23 press release.
The July 18 hack resulted in the theft of a significant amount of ERC-20 tokens, worth over $235 million at the time.
The attack forced the platform to suspend all trading and withdrawal activities while it assessed the damage and developed a recovery plan. The stolen assets have created a significant shortfall, preventing the exchange from meeting its crypto obligations to users.
Phased fiat withdrawals
The phased withdrawal plan will allow users to access up to 66% of their Indian rupee (INR) balances, and it will roll out in two stages.
The first stage will allow users to withdraw up to half of the 66% limit of their INR balances between Aug. 26 and Sept. 8. The second phase will allow users to withdraw the remaining 50% of the limit between Sept. 9 and Sept. 22
While WazirX confirmed that its INR reserves were unaffected by the cyberattack, it revealed that approximately 34% of INR balances remain frozen due to ongoing investigations by law enforcement agencies.
The exchange assured users that the remaining funds would be made available once the investigations were concluded. However, the timeline for this remains unclear.
Legal restructuring
In addition to the phased resumption of INR withdrawals, WazirX is pursuing a legal restructuring plan to address the deficit in crypto balances caused by the cyberattack.
The exchange has opted for a Singapore Scheme of Arrangement, a legal process that will allow it to propose a restructuring plan to users, subject to approval by creditors and the Singapore High Court.
WazirX emphasized that the Scheme of Arrangement is crucial for ensuring an equitable distribution of the remaining digital assets. The exchange will involve users in the decision-making process through polls and town halls to capture their preferences.
The decision to resume INR withdrawals marks a significant step in WazirX’s efforts to stabilize its platform and rebuild user confidence. The exchange has committed to keeping users informed throughout the restructuring process and to prioritizing fair outcomes for all parties involved.
