WazirX Founder Breaks Silence on ‘Secretly Moving’ $75M User Funds

WazirX founder Nischal Shetty has responded to allegations that the Indian crypto exchange “secretly moved” $75 million worth of user funds to exchanges Bybit and KuCoin. The accusations were brought forward by Ashish Singhal, co-founder of rival exchange CoinSwitch, following a $230 million worth July 2024 cyberattack on WazirX.

WazirX Founder Denies Moving Funds Secretly

In a series of posts on social media platform X, Shetty dismissed the claims of “secretly moving” user funds. He deemed these allegations to be a “false narrative” and implying that they were part of a “coordinated campaign” against the crypto exchange. Furthermore, he defended the transparency of WazirX’s operations, emphasizing the public nature of blockchain transactions.

“We all know how blockchain works, everything is traceable. POR (Proof of Reserves) would anyways be revealing all this,” Shetty wrote. Moreover, WazirX has recently taken steps to disclose its wallet addresses as part of its debt restructuring process.

False narrative, looks like coordinated campaign.

“secretly moved”? It was us who disclosed the addresses! We all know how blockchain works, everything is traceable. POR would anyways be revealing all this.

First Step: Share wallet addresses:[DONE]

Second step: Share POR… pic.twitter.com/n1oKYREsU0

— Nischal (Shardeum) 🔼 (@NischalShetty) October 22, 2024

In a court affidavit filed with the High Court of Singapore, the company revealed over 240,000 wallet addresses. However, the size of the data release has caused confusion, especially in India, where crypto literacy is still developing. “Parsing this data is nearly impossible for the average user,” Singhal stated on X.

To help users better understand WazirX’s wallet activities, CoinSwitch released a public dashboard tracking the movement of funds. According to the dashboard, $72.13 million in crypto was transferred to Bybit, and $1.5 million was sent to KuCoin following the July breach.

Shetty Answers Most Asked Questions

Shetty explained that the funds were not transferred for trading purposes, as Singhal had alleged, but rather as part of an ongoing process to onboard a custody provider. “Funds were moved to some exchanges because we are still in the process of onboarding a custodian. This process is taking longer than expected,” he said. Moreover, Shetty noted that finding a suitable custodian is challenging, as many providers do not support all tokens.

He outlined the steps WazirX is taking to improve transparency and security, including sharing wallet addresses and working on a Proof of Reserves report. “First Step: Share wallet addresses: [DONE]. Second step: Share POR [Ongoing]. Third Step: Onboard custody provider [Ongoing],” Shetty explained.

He added that the team is working diligently to complete the Proof of Reserves and finalize the custodian onboarding process. Shetty reassured users that WazirX remains committed to finding the best solution under the current circumstances, pointing out that the crypto ecosystem is still in its early stages.

“Not all tools are built, not all products are complete. So we need to find the best solution given the circumstances,” he wrote. Furthermore, Shetty emphasized that the exchange’s team is relentlessly working on finding a solution as soon as possible. As the situation develops, users are encouraged to monitor WazirX’s updates for further details on the Proof of Reserves and custodian arrangements.

Also Read: WazirX to Offer Proof-of-Reserves, Will $72M Bybit Fiasco Be Solved?