The Indian cryptocurrency exchange has been granted a four-month moratorium by the High Court of Singapore to help restructure its liabilities after suffering a $230 million hack in July.
The moratorium will give the company some breathing space to address user balances and assist in their recovery.
Importance of the moratorium
The court initially provided an automatic 30-day moratorium following the application, but the final approval was for a shorter period than the six months that was originally requested.
The exchange expressed gratitude for the court’s decision, and shared that it allows WazirX to focus on resolving the situation and restructuring effectively.
This move is quite important for ensuring a quick and fair resolution that includes input from creditors, allowing them some choice and potential benefits if the market improves.
As part of the court’s conditions, WazirX also committed to making its wallet addresses public, addressing user questions raised during court proceedings, releasing financial information, and ensuring that future voting on court applications is overseen by independent parties.
The company stated that it is working closely with advisors and stakeholders to create a plan that meets everyone’s needs.
WazirX will keep users updated on their progress and developments, repeating their commitment to resolving the issue efficiently.
How happened the WazirX hack?
WazirX experienced a giant security breach on July 18, leading to the unauthorized transfer of over $230 million in crypto assets, after the attack targeted the exchange’s multisig wallet on the Ethereum network and may have resulted from a compromised private key.
Following the incident, WazirX paused withdrawals immediately but took several days to halt trading as they managed the aftermath of the hack.
Elliptic reported that evidence suggests the attack was carried out by North Korea’s Lazarus Group, a well-known hacking organization responsible for high-profile cybercrimes.
Last week, Binance reiterated its stance that it doesn’t own or control WazirX.
There was an agreement between them at one time, but Binance stated that it was never finalized due to the operating company, Zettai’s failure to meet its obligations.
Binance also accused the director of Zettai, Nischal Shetty of making misleading statements regarding their relationship in affidavits submitted to support their case in court.
How it’s going?
The hackers behind the WazirX breach have been moving stolen funds in smaller amounts, often around 5,000 ether, or approximately $13 million, to Tornado Cash, a crypto mixer.
This privacy preserving method is also used by cybercriminals to obscure their tracks and make it harder for law enforcement to trace stolen cryptocurrency.
So far, more than 61,500 ether was transferred to this mixer.
As WazirX works through its restructuring process and addresses user concerns, it may regain some trust within the crypto community. But it won’t be a simple process, that’s for sure.
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