WazirX, the leading Indian cryptocurrency exchange, is set to phase in rupee withdrawals starting August 26, following a massive security breach in July that resulted in the loss of $230 million.
The exchange had temporarily suspended all withdrawals in the wake of the hack but is now preparing to allow users to access their funds in a controlled manner.
Phased Withdrawal Plan for Users
In an effort to restore confidence and provide liquidity to its users, WazirX has announced a phased withdrawal plan.
Starting Monday, August 26, users will be able to withdraw up to 66% of their rupee balances in two stages.
From August 26 to September 8, users can withdraw up to half of this amount. The remaining portion will become accessible between September 9 and September 22.
WAZIRX REOPENS INR WITHDRAWALS WHILE CRYPTO REMAINS LOCKED
WazirX is allowing users to withdraw up to 66% of their INR starting Monday, a month after the $230M breach.
Phased withdrawals will gradually unlock funds, but crypto withdrawals remain frozen—likely for the long haul.… pic.twitter.com/dFQq2nJezs
— Crypto Town Hall (@Crypto_TownHall) August 24, 2024
The exchange emphasized that Zanmai Labs, the operating entity responsible for its rupee-related activities, was not affected by the hack and maintains sufficient reserves to cover user balances.
However, due to ongoing investigations by law enforcement agencies, 34% of the funds will remain frozen, with no clear timeline for their release.
Security Concerns and Future Outlook
In a statement released on Friday, WazirX expressed regret over the inability to resume cryptocurrency withdrawals, citing the substantial loss of ERC-20 tokens during the hack. The exchange acknowledged that there are currently insufficient token assets to meet the liabilities associated with user accounts.
“While we regret that users have not been able to make cryptocurrency withdrawals from their accounts for some time, the resumption of these withdrawals is not yet feasible,” the company said. “The cyberattack resulted in a significant loss of ERC-20 tokens, leaving us unable to cover all user liabilities at this time.”
As the investigation continues and the exchange works to bolster its security measures, the phased withdrawal plan is seen as a critical step toward rebuilding trust among its user base.
The timeline for the release of the remaining 34% of funds remains uncertain, but WazirX assures users that it is cooperating fully with authorities to resolve the issue as swiftly as possible.
WazirX Attack Update: Crypto Balances to be Reorganized to Formulate Distribution Plan, Indian Rupee Withdrawals to Open Gradually pic.twitter.com/4G4gXHyH0u
— Da Crypto News (@DaCryptoNews) August 23, 2024
Conclusion
WazirX’s phased approach to resuming rupee withdrawals is a cautious but necessary move following the significant security breach.
While users will soon regain partial access to their funds, the ongoing investigations and the freeze on a portion of the assets highlight the challenges the exchange faces in restoring full operations.
As the situation unfolds, WazirX’s ability to manage user expectations and enhance security will be crucial in determining its future in the Indian cryptocurrency market.
