Thousands of Indian crypto investors are in a difficult position after WazirX, one of India’s largest cryptocurrency platforms, was hacked in July 2023. The attack led to the theft of $230 million worth of assets, and investors like Shubham, who had money in Bitcoin, Ether, and Matic, have been unable to sell their holdings or book profits ever since. This situation has left many wondering if there is any way for them to recover their funds.
The Cyber Attack and Its Aftermath
The WazirX platform was hit by a major cyber attack on July 18, 2023. Hackers targeted the platform’s Ethereum wallet, stealing $230 million worth of assets. Following the attack, WazirX was forced to stop all trading on its platform, leaving investors unable to cash out their profits or recover their funds. While WazirX has allowed some withdrawals in Indian rupees, many users’ crypto holdings remain inaccessible.
To incentivize recovery efforts, WazirX announced a $23 million reward for anyone who can help retrieve the stolen funds. However, the platform’s ability to fully back its customers’ assets has been affected. Despite this, the company is actively seeking ways to compensate its users.
WazirX’s Efforts to Compensate Investors
Zettai, the company behind WazirX, has filed for a moratorium in a Singapore court. This means the platform is seeking time to address the crisis and return funds to investors. Meanwhile, Indian and Singaporean authorities are investigating the hack.
WazirX is developing a plan to return token assets to users, which could include passing on some of the losses to investors holding crypto portfolios. Additionally, WazirX may offer users the opportunity to benefit from the rising value of cryptocurrencies in the market, allowing them to recover some of their funds if prices increase over time.
Crypto’s Legal Status in India: What Can Investors Do?
One of the biggest challenges facing Indian crypto investors is the uncertain legal status of cryptocurrencies in the country. The Reserve Bank of India (RBI) has often warned against digital assets, and there is no clear legal framework governing cryptocurrencies. This lack of regulation means that platforms like WazirX are not officially under the oversight of any Indian authority.
However, all is not lost for investors. Even though cryptocurrencies do not have legal backing in India, investors still have some legal recourse. In cases of fraud or theft, they can file a case in an Indian court based on the terms and conditions agreed upon with the platform. Legal experts say that these contracts can be the basis for claiming compensation or seeking justice.
The Road Ahead for WazirX and Indian Investors
WazirX has assured its users that it is working on a transparent plan to return their funds. During the four-month moratorium, the company plans to disclose its wallet addresses in court, providing clarity on the remaining assets. However, experts warn that the stolen funds may have already been laundered through coin mixer platforms like Tornado Cash, making recovery efforts more challenging.
As the investigation continues, Indian crypto investors will have to rely on legal channels and WazirX’s compensation plans to try and recover their funds. In the meantime, this hack serves as a reminder of the risks associated with investing in an unregulated asset class like cryptocurrency.
