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The last month has been a difficult time for users of the WazirX platform due to the cyber attack on July 18, 2024 and the subsequent suspension of withdrawals and trading to mitigate the impact on the platform. We apologize for this delay, which was necessary to assess the situation and establish reliable next steps to optimize the solution for users.
Over the past few weeks, the WazirX team has been working tirelessly with its partners to come up with a plan, and we are happy to inform all users of the next steps to address two major user concerns: cryptocurrency balances and INR balances.
Cryptocurrency balances
While we regret that users have been unable to withdraw cryptocurrency from their account on the platform for some time, it is not possible to simply resume cryptocurrency withdrawals.
Due to the loss of a significant balance of ERC-20 tokens due to cyber attack and theft, there are not enough token assets to meet the liabilities arising from the token balances due to the users of the platform.
The nature of cyberbullying means that there will likely always be a mix of users who support and oppose different outcomes. The key to fairly resuming cryptocurrency withdrawals is to do so as part of a legally binding solution agreed upon and approved by users in accordance with statutory voting thresholds.
We have decided to implement the Singapore Scheme of Arrangements to facilitate a fair and user-approved distribution of cryptocurrency assets under the scheme. The scheme is a necessary step to ensure that users of the platform are treated fairly and in line with user preferences so that the outcome remains legally binding on all relevant parties.
Although this legal process will be guided by us and our advisers, ultimately users will be able to vote and approve the restructuring proposal before the Scheme takes effect; this means users will be updated with all material developments and requests for your opinions. and municipalities to ensure that the proposed restructuring incorporates what users want.
INR balances
After careful evaluation and understanding of all user feedback, we are pleased to announce that the withdrawal suspension for INR balances will be lifted on 26th August 2024 and INR withdrawals will be enabled in a phased manner.
To make it easier for more users to withdraw INR, we are also reducing the withdrawal fees by 60% from INR 25 to INR 10.
Although the operating entity for INR operations, Zanmai Labs Pvt Ltd (“Zanmai”), was not affected by the cyber attack on the WazirX platform and has sufficient INR reserves to cover all INR users’ balances, not all of these balances are currently available. to remove Due to ongoing disputes and certain investigations by various law enforcement agencies (“LEAs”), which helps (and is not the target of such an investigation), ~34% of INR balances are currently frozen and not immediately available for withdrawal.
As a result, starting from August 26, 2024 (next Monday), all eligible users holding INR balances will be able to withdraw up to ~66% of their INR balances as reflected on the WazirX platform in phases;
- From August 26 to September 8, 2024, users will be able to withdraw up to half of the current ~66% limit of their INR balance; and:
- From September 9 to 22, 2024, users will be able to withdraw up to the full limit of 66% of their INR balance.
We would like to assure all users that Zanmai is not the target of any investigation that has resulted in the freezing of INR balances. Funds were frozen by LEAs as a precautionary measure while they pursued their investigations against third parties. All INR balances remain secure and will be available for withdrawal once appropriate investigations and disputes are completed. While the timeline for the release of these frozen INR balances is currently unclear, we would like to assure you that we are doing our best to expedite this process for the benefit of our users.
Next steps
We will soon be making an application to the High Court of Singapore to ensure that the platform has the time and breathing room it needs to restructure under the Scheme of Arrangement. Simultaneously, INR withdrawals will be available in phases. We will provide users with additional updates in the coming days. watch this space.
Cryptocurrency Balances FAQ.
Question: What is the Singapore Scheme of Arrangement?
A Scheme of Arrangement is a corporate rescue and restructuring mechanism set out in the Singapore regulatory framework under the Insolvency, Reorganization and Winding Up Act (2018, “IRDA”). Through the scheme, a company can make a proposal to its creditors to restructure its debts and provide stronger compensation to creditors than in a creditor approval and court-sanctioned liquidation.
A creditor-approved and court-approved scheme will be legally binding on both the company and its creditors, and IRDA sets out clear deadlines, requirements and court processes to ensure that creditors have sufficient information to make an informed decision about the proposed terms. for
Question: Why are only cryptocurrency balances restructured? Why are INR balances not being rebuilt as well?
A. Zanmai’s management has determined that Zanmai has sufficient assets to meet the obligations of platform users with respect to their INR balances, although some of them are currently frozen. As such, INR withdrawals are being reopened in phases.
On the other hand, as a result of the cyber-attack on July 18, 2024, there are no cryptocurrency token assets available to meet the obligations of platform users related to their cryptocurrency balances.
INR balances FAQ.
Question: Why did it take so long for INR withdrawals to resume?
Answer: We apologize for the delay, which was critical to a thorough assessment of the financial impact and legal implications of the cyber attack. Based on our findings so far, we can proceed with the resumption of INR withdrawals (in phases) as requested by many of our users.
Question: Why can’t I fully withdraw my entire INR now?
A: While Zanmai has sufficient INR reserves to cover all INR user balances, ~34% of these INR balances are currently frozen due to ongoing disputes and some investigations by LEAs (none of which are directly against Zanmai). As a result, ~66% of INR balances are currently available for withdrawal.
Most of the INR freeze happened when the Platform allowed users to withdraw their cryptocurrency token balances from a wallet of their choice.
In such cases, users would pay INR, buy cryptocurrency tokens with INR and withdraw their cryptocurrency balances. Later, LEA’s investigations led to traces of the INR of these users targeted by these investigations to Zanmai’s bank account (where the user deposited his INR), and LEA froze Zanmai’s bank account. However, at the time of the freeze, these users had already redeemed INR for cryptocurrency trading, withdrawn such cryptocurrency balances, and no longer had INR balances in their accounts. We have provided LEA with the crypto wallet addresses to which the cryptocurrency tokens were transferred. We are following up on these issues and working to lift the freeze on Zanmai’s bank accounts.
We are fully cooperating with this investigation and once the frozen funds are released, they will be available for withdrawal.
Question: When can I fully withdraw my entire INR?
Answer: It is not clear at this stage when the ongoing disputes and LEA investigations will be concluded, allowing the remaining INR balances to be released. However, we are making every effort to expedite this process for our users and will keep you informed of any significant progress.
Question: How can I withdraw my INR?
A: You can follow the instructions in this link.
Question: When will I be able to receive my INR balances?
A: ~66% of your INR balance will be available in withdrawal phases starting August 26, 2024;
- From August 26 to September 8, 2024, users will be able to withdraw up to half of the current ~66% limit of their INR balance; and:
- From September 9 to 22, 2024, users will be able to withdraw up to the full limit of 66% of their INR balances.
The remaining ~34% will be available for withdrawal once ongoing disputes and LEA investigations are resolved and the remaining funds are released.
H. Will I be able to withdraw INR generated from trades executed after Public Freeze (18 July 2024 13:00 IST) and Trade Freeze (21 July 2024 20:30 IST)?
A: As announced on August 8, 2024, all trades (including INR related trades) made after the withdrawal freeze will be reversed.
Users will be able to withdraw up to 66% of the INR balances in their accounts at the time of the withdrawal freeze.
Question: Will I be able to fully withdraw my remaining INR balance once the investigation is over and the frozen funds are released?
Answer: We currently do not expect all frozen INR balances to be released at the same time as there are many ongoing investigations and disputes. It is possible that some frozen INR balances may be released before others. We will update users when we can allow further withdrawals.
Question: How does withdrawing INR affect my cryptocurrency balances?
A: Withdrawal of INR does not affect your cryptocurrency balances.
Disclaimer: Cryptocurrency is not legal tender and is currently unregulated. Please ensure that you carry out a sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information presented in this section does not represent any investment advice or the official position of WazirX. WazirX reserves the right, at its sole discretion, to modify or amend this blog post at any time and for any reason without prior notice.
