Rival Exchange CoinSwitch Sues WazirX to Recover $9M in Trapped Funds

As Indian crypto exchange WazirX reels from the massive $230 million hack , the rival exchange CoinSwitch is pursuing legal action to recover over $9 million in trapped funds.

CoinSwitch, which operates an exchange aggregator, posted on X that it has substantial assets stuck on WazirX’s platform, including fiat currency, ERC20 tokens, and other cryptocurrencies. Despite repeated attempts to reach a resolution with WazirX, CoinSwitch has been unable to recover the trapped funds.

The exchange further revealed that the affected funds represent a small portion of its total assets, with less than 1% directly impacted by the cyber attack. To ensure the stability of its platform and maintain a 1:1 ratio for user holdings, CoinSwitch is utilizing its own treasury reserves. CoinSwitch posted:

From the day of the incident, we have tried to be in constant touch with the WazirX team, seeking recovery of the funds that are stuck on their exchange. However, our efforts have not come to fruition, leaving us with no choice but to pursue legal action to recover the funds.

Founder and CEO of WazirX Nischal Shetty took to social media to hit back at CoinSwitch soon after the lawsuit was made public. Shetty wrote on X that they “will treat all users fairly – large or small, no side deals.”

WazirX Files for Moratorium in Singapore High Court Under Insolvency Act

WazirX also announced that its parent company Zettai has filed an application with the High Court of Singapore for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate its intention to restructure its liabilities under a scheme of arrangement.

A moratorium is a legally binding hiatus in the right to collect debts from the company. This pause in business protects the debtor while a recovery plan is agreed upon and put in place.