WazirX CEO Addresses $75M Crypto Transfer Allegations

Nischal Shetty, the founder of WazirX, has addressed claims alleging that the company transferred $75 million in cryptocurrency to two significant exchanges without notifying its users.

This controversy arose after the Indian crypto exchange published over 240,000 wallet addresses as part of a four-month moratorium permitted by a Singapore court, following a $235 million hack in July.

CoinSwitch’s Claims

In an October 21 post on X, Ashish Singhal, CEO of CoinSwitch, elaborated on the findings related to the data released by WazirX. He explained that his team developed a system to help WazirX users navigate through the extensive information provided.

Singhal highlighted that CoinSwitch’s concern stems from the fact that it maintains Indian rupees and virtual digital assets (VDA) with WazirX. He noted that after the trading platform halted transactions following the hack, CoinSwitch had to utilize its treasury funds to reimburse customers and is now taking legal action against the exchange to recover the disbursed amounts.

The CEO asserted that while analyzing the data, his team found evidence that WazirX transferred a substantial quantity of cryptocurrency to several major exchanges shortly after the hacking incident.

He reported that the Mumbai-based exchange sent digital assets valued at $72.13 million to Bybit, with an additional transfer of $1.5 million to KuCoin. Moreover, upon reviewing over 200,000 addresses, it was noted that approximately half held balances of less than $10, while nearly 18,000 had zero balances.

However, Singhal chose not to disclose further details regarding the alleged fund transfers, citing the ongoing legal proceedings against WazirX.

WazirX’s Defense

The day following these allegations, WazirX CEO Nischal Shetty took to social media to provide his perspective. Labeling the claims as a “false narrative” and a “coordinated effort,” Shetty refuted the notion of any “secret” fund transfers as reported by the media after the CoinSwitch allegations.

He clarified that the transfer of assets to the exchanges was a legitimate step taken to onboard a new custodian, following the company’s separation from Liminal after the July breach.

Shetty further explained that the intricacies of custodianship mean that not all custody providers support every token, necessitating the temporary relocation of some cryptocurrencies to exchanges like Bybit and KuCoin as WazirX sought better custody solutions.

Despite offering a $23 million reward and engaging forensic experts and law enforcement, the crypto trading platform has yet to recover any of the funds stolen during the July incident.

The prospects of recovery appear grim, as reports indicate that the perpetrator, allegedly linked to North Korea, has already laundered nearly all of the stolen assets.