WazirX Might Face Lawsuit from CoinSwitch for Nearly $10 Million in Trapped Funds

The post WazirX Might Face Lawsuit from CoinSwitch for Nearly $10 Million in Trapped Funds appeared first on Coinpedia Fintech News

CoinSwitch, a major Indian cryptocurrency exchange, is suing rival platform WazirX to recover ₹810 million ($9.65 million) in assets trapped following a cyber attack that led to the theft of $230 million in digital assets from WazirX. The lawsuit comes after WazirX proposed a controversial “socialized loss” strategy to distribute the loss across its users, which CoinSwitch opposes.

Despite CoinSwitch’s continuous efforts to communicate and resolve the issue with WazirX, they have been unsuccessful in retrieving their assets. This lack of progress has left CoinSwitch with no other option but to pursue legal action to recover the funds.

CoinSwitch’s Funds Stuck on WazirX

The funds stuck on WazirX represent about 2% of CoinSwitch’s total assets, including ₹124 million in fiat currency, ₹287 million in ERC20 tokens, and ₹399 million in other cryptocurrencies. Despite this setback, CoinSwitch assures its users that its overall assets are 1.51x their holdings, maintaining at least a 1:1 ratio by tapping its treasury.

Ongoing Challenges in India’s Crypto Industry

This legal battle underscores the growing challenges in India’s crypto industry, which is already strained by regulatory uncertainty and security issues. The WazirX incident, the country’s largest crypto heist, has further shaken trust in the sector. WazirX had proposed returning only 55% of customer holdings, locking the remaining 45% in USDT-equivalent tokens, but the recovery efforts may take years, and success is not guaranteed.

There is more coming up to this story, stay tuned with us!