In a significant development for India’s cryptocurrency sector, Singapore’s High Court has granted WazirX a four-month moratorium under specific conditions, the company confirmed to CoinDesk.
WazirX, which suffered a massive $234 million hack in July, filed for a six-month moratorium, seeking time to address the fallout from the breach.
The court, however, imposed conditions that the exchange must meet.
These conditions include revealing the addresses of its crypto wallets via a court affidavit, disclosing its books of accounts within six weeks, and ensuring that any future decisions, such as voting on resolutions, take place on an independent platform.
WazirX is also required to respond to all user queries promptly.
The moratorium provides the company with some breathing room as it navigates legal, financial, and operational challenges following one of India’s largest cryptocurrency hacks.
During the proceedings, the judge commended WazirX for acting in “good faith” by immediately seeking legal protection to resolve the situation in a structured manner.
She also urged the company’s legal team to “think about” disclosing other assets that may exist beyond the stolen tokens.
Nischal Shetty, WazirX’s founder said in a statement,
“Our immediate filing for the moratorium was a decisive step taken to ensure the fastest, fairest, creditor-approved, legally binding path to resolution.”
Hacker laundered most of stolen funds
Meanwhile, the hacker behind the July breach has nearly finished laundering the stolen funds.
Blockchain analysis from Arkham shows that most of the $234 million in stolen tokens have been moved through Tornado Cash, a privacy tool that obfuscates transaction history.
The hacker’s original haul now amounts to only $6 million in Ether (ETH), underscoring how difficult it has been for authorities to recover the stolen assets.
Despite the efforts, WazirX’s legal advisors have previously stated that customers are unlikely to be fully compensated in cryptocurrency terms.
Independent audit absolves Liminal Custody
Earlier this month, Liminal Custody, a cryptocurrency custody provider, distanced itself from the breach.
An independent audit conducted by Grant Thornton concluded that Liminal’s infrastructure played no role in the hack.
“The findings confirmed the breach occurred outside of Liminal’s systems,” the company clarified in a blog post earlier this month.
In its first post-mortem report, WazirX pointed to discrepancies between Liminal’s interface and transaction data as a potential source of the breach.
However, the Grant Thornton audit found no evidence of any compromise within Liminal’s systems.
Liminal Custody stated that its “frontend and backend infrastructure is secure,” with no signs of vulnerabilities that could affect the transaction workflow.
WazirX continues to pursue legal avenues to mitigate the damage caused by the hack and explore ways to recover the lost funds.
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