- CoinSwitch initiates legal action against WazirX over trapped assets.
- WazirX faces mounting legal challenges after losing 45% of its assets in a cyberattack.
CoinSwitch, an Indian Cryptocurrency exchange is suing its rival, WazirX, to recover $9.6 million in assets that have been stuck on WazirX’s platform since a $230 million cyberattack in July. CoinSwitch announced that legal action on X had failed after multiple attempts to resolve the issue directly. These trapped assets account for about 2% of CoinSwitch’s total holdings.
WazirX, which lost approximately 45% of its assets in the hack, is currently facing mounting legal challenges. On August 3, a petition was filed in India requesting an investigation into possible fraud by the National Company Law Tribunal. This petition could lead to a freeze on WazirX’s assets. Furthermore, WazirX’s parent company, Zettai Pte, is seeking a six-month moratorium from Singapore’s High Court. This would provide WazirX legal protection from creditors while it restructures its liabilities.
CoinSwitch Legal Battle Intensifies WazirX’s Challenges
CoinSwitch’s lawsuit adds further complexity to WazirX’s challenges. The legal dispute highlights the vulnerability of India’s crypto sector. Sathvik Vishwanath, CEO of Unocoin, emphasised that while the sector is still young, proper regulation is lacking. India’s Finance Ministry is expected to release a consultation paper on cryptocurrency regulation in September.
On August 23, WazirX announced the gradual reopening of INR withdrawals, starting on August 26, following the July hack. The platform had previously suspended trading and withdrawals after hackers stole $230 million in ERC-20 tokens. The ripple effects of the WazirX hack and subsequent legal actions could prompt more stringent regulations in India’s crypto industry. As CoinSwitch continues its legal battle, the entire sector watches closely for signs of reform.
This lawsuit is not an isolated event. Recently, other cryptocurrency scams in Asia have made headlines. In Malaysia, authorities busted a cryptocurrency fraud ring that targeted Japanese investors. Similarly, in the Philippines, a large-scale scam hub was dismantled. These incidents underscore the growing concerns surrounding security and fraud in the crypto industry.
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