 | « Back to article | Print this article |
WazirX lost about 45 per cent of its crypto assets to the security breach. People privy to the discussions say North Korea has been mentioned.
The top leadership of WazirX, the cryptocurrency exchange platform that lost $230 million to a cyberattack on July 19, is in touch with the financial intelligence unit-India (FIU-IND) as well as the United States Federal Bureau of Investigation to trace the money lost.
Cryptocurrency platforms are required to register with FIU-IND, housed in the finance ministry's department of revenue, to be able to operate in India.
The unit also investigates offences such as money laundering.
"We have raised a police complaint and are in touch with FIU since WazirX is registered there. We have initiated discussions and see which agency can come in and help us with tracing funds, and how they will coordinate," Nischal Shetty, founder and CEO of WazirX, told Business Standard.
WazirX lost about 45 per cent of its crypto assets to the security breach. People privy to the discussions say North Korea has been mentioned.
"The tokens that have been stolen are lying with the attacker and are useless right now. The use comes only when you try to launder it in return for cash," Shetty stated.
"With the FBI's reach and the trackability of crypto, if we know the exit point, the funds can be frozen and the process can be done quickly," Shetty added.
Last week, WazirX temporarily suspended trading and withdrawals for users on its platform.
It announced plans to 'socialise the losses' and distribute the impact of the heist across all its users regardless of whether an investor was affected or not.
The platform's users have raised their concerns on social media urging the company to independently contribute to the losses from its own treasury and assets, and not rely on its users. Rivals are not impressed with the move, either.
'The first contribution to losses should ALWAYS come from the company (i.e. WazirX in this case) and the treasury and assets the company holds,' Sumit Gupta, co-founder CoinDCX, a competitor of WazirX, said in a post on X.
'I have not seen any such commitment around this from the company side, instead making customers directly absorb the 45 per cent losses is utter nonsense,' Gupta added.
Shetty argues that his strategy to distribute the impact of the losses across its user base could accelerate resumption of services on the platform.
"If you look at all of the other insolvencies, it is a long process taking five to 10 years for it to come to a conclusion," he said.
"We asked ourselves if we can expedite this as the biggest request that came after the hack was to start the platform since we have 55 per cent of the remaining fund," he added.
A poll being conducted by WazirX for the choice of recovery will end on August 3.
The platform may look to tap other ways of raising the amount lost to the attack, such as future profits of the exchange, new projects, and a way to bring potential investors to fund the company.
"When we work on this recovery process, we are looking at the profits of the exchange, future revenues, new programs that we launch in terms of a new project where we can create tokens, or a potential investor comes in," Shetty said.
Feature Presentation: Ashish Narsale/Rediff.com
