In an unprecedented move, victims of the notorious WazirX hack, which occurred in July 2024, are gearing up for a class-action lawsuit. This legal action is aimed at recovering over $600,000 in crypto assets from India’s largest cryptocurrency exchange. This development marks a significant chapter in the saga of India’s biggest crypto theft, where a staggering $230 million worth of digital currencies were illicitly taken. Recent investigations reveal that the hackers have laundered the stolen funds using Tornado Cash, adding another layer of complexity to the unfolding drama.
WazirX’s Recovery Efforts: A Bumpy Road Ahead
The impending class-action lawsuit comes amidst WazirX’s attempts to regain stability. Just days prior, WazirX had issued an official Proof of Reserves (POR) report, outlining the current status of its crypto holdings. Reports suggest that the legal action is directed at WazirX’s parent company, based in Singapore. This announcement follows nearly two months after WazirX had successfully petitioned for a four-month moratorium in Singapore, ostensibly to concentrate on recovery and address issues arising from the cyberattack.
Back in July, the popular crypto exchange was rocked by a security breach, resulting in the loss of over $52 million in Ether and more than $100 million in Shiba Inu, among other crypto assets. According to internal reports, the stolen funds represent approximately 45% of the company’s total reserves, as per their June 2024 financial statement.
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Victims Push Forward Despite Legal Hurdles
Despite WazirX’s parent company securing a moratorium, a determined group of victims is moving ahead with the class-action lawsuit. Around 30 victims have enlisted the services of lawyer Aman Reehan Khan to represent them in filing a complaint with the National Consumer Disputes Redressal Commission (NCDRC) by November.
Khan asserts that the victims have a valid complaint, arguing that their agreements were with Zanmai Labs Pvt Ltd, the entity responsible for asset management. He raises questions about WazirX’s strategic moves to file for a moratorium and initiate restructuring through its parent company in Singapore.
Anticipating a Larger Wave of Legal Challenges
Khan anticipates that more victims will join the lawsuit, seeking to regain their full crypto balances rather than settling for the 55% withdrawal initially promised by WazirX in September. Beyond this class-action lawsuit, WazirX faces additional legal challenges, including a complaint from Ashish Singhal of CoinSwitch and another lawsuit filed by Javir Bains on October 18th, calling for a thorough investigation into the hack.
Moreover, a grassroots movement has emerged on social media platforms like Twitter/X, where profiles such as “Justice for WazirX Users” are actively campaigning to raise awareness, urging more victims to come forward and hold the exchange accountable.
The Broader Implications for India’s Crypto Industry
The unfolding events surrounding WazirX have significant implications for India’s burgeoning crypto industry. The hack and subsequent legal actions underscore the critical need for robust security measures and regulatory oversight to protect investors and maintain market integrity. As the total crypto market cap hovers around $2.2 trillion, as indicated by TradingView charts, the stakes remain high for all stakeholders involved.
As the situation continues to develop, all eyes are on the upcoming legal proceedings and WazirX’s recovery efforts. The outcomes will likely shape the future landscape of cryptocurrency exchanges in India and beyond.
