WazirX To Reopen INR Balance Withdrawals Starting Aug 26, Caps Withdrawals At 66%

Revoking the suspension on withdrawals a month after the infamous $230 Mn crypto heist, WazirX on Friday (August 23) said that it will open up INR balance withdrawals starting August 26 in a staggered manner. 

“After a careful assessment and understanding of all user feedback, we are pleased to announce that the suspension on withdrawals of INR balances will be lifted on 26 August 2024, and INR withdrawals will be enabled in phases,” said WazirX in a blog post. 

It, however, said that users will be allowed to access only 66% of the funds in their wallets. As per the WazirX post, customers will be able to withdraw up to half of the 66% limit between August 26 and September 8. The access to the remaining half of the set threshold will be enabled between September 9 and 22. 

“While Zanmai (WazirX’s parent entity) has sufficient INR reserves to cover all INR user balances, ~34% of these INR balances are currently frozen due to ongoing disputes, and certain investigations by LEAs (law enforcement agencies) (none of which are directly against Zanmai). As a result, ~66% of INR balances are currently available for withdrawal,” added the crypto exchange. 

The company added that the 34% of the INR balances were frozen by enforcement agencies as a “precautionary measure” while pursuing their probe against “third parties”. “All INR balances remain secure and will be made available for withdrawal once the respective investigations and disputes are concluded,” added WazirX.

The crypto exchange also said that it will reduce the withdrawal fees on its customers by 60% to INR 10 from INR 25 previously.

Meanwhile, the company also said that it will “shortly” file an application in the High Court of Singapore to “ensure that the platform has the time and breathing space it needs to pursue a restructuring under a scheme of arrangement”.

Via the scheme of arrangement, the company will be able to put forth a proposal to its creditors to restructure its debts to “deliver stronger recoveries to creditors” compared to a liquidation process. It is pertinent to note that a creditor-approved and court-sanctioned scheme will be legally binding on both the company and its creditors.

“We have decided to pursue a Singapore scheme of arrangement to facilitate an equitable and user-approved distribution of cryptocurrency assets pursuant to a scheme. A 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,” added WazirX.

The development comes a month after the crypto exchange was hit by a cyberattack, which saw hackers stealing nearly $234.9 Mn in crypto assets. These represented 45% of total user funds on the platform. 

Right afterwards, WazirX halted trading and temporarily suspended withdrawals on the platform. Earlier this month, WazirX said that a first information report (FIR) was filed in connection with the $230 Mn cyberattack on the crypto exchange.

Additionally, the company is also facing a petition filed with the National Company Law Tribunal (NCLT) that seeks probe into the hack. Just days ago, Wazir X said that a probe into the hack revealed that the exchange’s systems and laptops were not compromised in the cyberattack.

Recently, the company ditched its wallet infrastructure provider Liminal and began migrating its remaining assets held with the latter to new multisig wallets.

Additionally, it also pitched a socialised loss strategy that proposed making customers absorb 45% of the losses caused by the hack. However, the plan was shelved after user backlash online.