Highlights:
- Delhi High Court orders probe into the WazirX hack and question management’s role in user fund security.
- WazirX users gain civil court access to recover frozen funds post-hack; court seeks transparency.
- WazirX reveals 240,000 wallet addresses amid restructuring; transparency efforts continue under scrutiny.
The Delhi High Court has issued notices to the Enforcement Directorate and the Financial Intelligence Unit. The court seeks to determine if an official investigation can be launched into the hack of the cryptocurrency exchange WazirX. The decision comes after Jaivir Bains filed a written petition. He called for a detailed investigation into how such a significant breach could take place.
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Breaking : Delhi high court directed the police to investigate Wazirx Hack – whether it was an inside job or not & also directed Police to involve the FIU if evidence emerge. pic.twitter.com/xK3DSUsRFM
— Crypto India (@CryptooIndia) October 18, 2024
Justice Sanjeev Narula has ordered that the Deputy Commissioner of Police of Delhi Police’s Intelligence Fusion and Strategic Operations unit submit a status report regarding the investigation.
According to the petitioner, the negligence concerns that the management of WazirX was not carrying out the necessary security measures. He urged the court to make the company pay for the hack. He also wanted to know whether the FIU and ED could intervene, considering that the cryptocurrency sector is unregulated in India.
WazirX Users Granted Permission for Civil Court Action
The Delhi High Court has also allowed WazirX users to file a civil suit against the company. The decision also gives users the opportunity to retrieve locked funds involved in the hack in July. WazirX had frozen the crypto and balances of nearly 4.4 million of its users, then suspended all transactions after the attack. Many users were left without access to their accounts and suffered huge financial losses.
The Delhi High Court accepted the petitioner’s concerns. However, it pointed out that in India, cryptocurrency is an unregulated entity, so it is not able to directly make the FIU look into the illegal funds. However, even with this limitation, the court directed the ED and FIU to issue notices to have clarity on whether they have the legal reach to intervene in the matter.
This development gives hope to affected users who have not been able to access their funds for months. It also provides a further avenue for recovery via approval to approach civil courts.
Disclosure of 240,000 Wallet Addresses Amid Debt Restructuring
Recently, WazirX disclosed 240,000 wallet addresses and balances in Singapore. The move is part of the exchange’s ongoing debt restructuring efforts. It is a strategic step aimed at dealing with the company’s financial indebtedness.
📢 Disclosure of 240,000+ wallet addresses pursuant to debt restructuring process
At WazirX, we’ve always believed that transparency is key to building and maintaining trust with our users. Today, we’re taking another step forward in that journey by sharing something… pic.twitter.com/JN47z21PI3
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) October 17, 2024
The revelation demonstrates WazirX’s efforts towards transparency with stakeholders amid financial and operational obstacles. The company aims to show investors and users the amount of assets managed to boost confidence. The market is attempting to regain stability and rebuild confidence. However, the company recently sent incorrect confirmation emails to around 9,000 users who had not applied for a moratorium of the company.
Court Orders IFSO to Submit Status Report on Ongoing Investigation
The IFSO unit of Delhi Police has been instructed by Justice Narula to submit a status report about their probe into the WazirX hack. The move will examine how law enforcement investigations have tracked down the hackers who masterminded the breach.
The IFSO unit, an authority on cybercrime, will also be key in sorting out how the hack had been carried out. According to the court, the IFSO unit’s report should provide clarity on whether WazirX acted in a way that safeguarded user funds.
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