WazirX Faces Legal Action from CoinSwitch to Recover ₹810 Million Stuck Assets

• CoinSwitch has filed a lawsuit against WazirX to recover ₹810 million in assets following a major cyber attack on WazirX.
• WazirX’s controversial proposal to spread losses among users has led to increased tensions and a lack of cooperation.
• The lawsuit highlights the need for improved security and transparent practices in India’s volatile cryptocurrency market.

CoinSwitch, a prominent cryptocurrency exchange in India, has filed a lawsuit against its competitor WazirX to recover ₹810 million ($9.65 million) worth of assets stuck following a massive cyber attack. This attack led to the theft of approximately $230 million in digital assets from WazirX, causing significant disruptions in the Indian cryptocurrency market.

WazirX’s Controversial Response to Cyber Attack

The decision to sue comes after WazirX proposed a socialized loss strategy, which would involve distributing the losses from the cyber attack across its user base. CoinSwitch opposed this approach, seeking to retrieve its funds instead. The assets stuck on WazirX amount to around 2% of CoinSwitch’s total holdings, including ₹124 million in fiat currency, ₹287 million in ERC20 tokens, and ₹399 million in other cryptocurrencies.

CoinSwitch’s Efforts to Resolve the Issue

Though CoinSwitch has tried to reach out to WazirX in endeavours to retrieve the lost funds, no success has been made. The firm has indicated that there is little or no headway in all efforts to resolve this situation amicably. As a result, CoinSwitch has now resorted to court proceedings in an attempt to get its property, stressing why WazirX has not been of any assistance in solving the issue.

Both parties involved in this lawsuit are two of the well-known cryptocurrency exchanges in India, a country where things are becoming tighter for this industry which is already facing issues of regulatory compliance and security. The hacking of WazirX which is the largest that has happened in the country to date, has diminished the confidence of the users and investors further. Customers’ trust was not restored with WazirX’s strategy to only refund 55% of consumer deposits while 45% would be tied up in USDT pegged tokens.

Spiritual Crises and Future Effects

The current situation reveals the clarity of purpose required in putting up better precautions and honest regulation in the area of cryptocurrency. As the court processes continue, it will be paramount to observe the degree of user faith and how the market forces are changing in the context of cryptocurrency in India. The ruling in this case could change how exchanges address issues of security laxness and refunding of lost funds.