CoinSwitch CEO Ashish Singhal has accused WazirX of transferring approximately 73.68 million dollars worth of users' cryptocurrency from its platform to global exchanges Bybit and KuCoin. WazirX made more than 240,000 wallet addresses public as part of restructuring itself after a large cyberattack in July 2024. Singhal made the claims on October 21, 2024, as CoinSwitch launched a public dashboard to track the movement of funds.
According to Singhal, CoinSwitch has fiat and crypto assets stored with WazirX, which halted withdrawals without permission. As a result, CoinSwitch used its treasury to cover the affected users' funds while initiating legal proceedings against WazirX in July 2024. The total amount trapped was revealed to be over $9 million, a small portion of CoinSwitch's overall assets.
WazirX CEO Nischal Shetty, however, admitted to the fund transfer to Bybit and KuCoin but denied it was done for trading purposes. Shetty said WazirX is still onboarding a new custodian, adding that the process has been taking longer than expected. He assured customers that the transfers were necessary for secure storage until the custodian was in place.
Shetty also responded to circulating misinformation that WazirX had used the transferred funds for trading. He emphasised that Proof of Reserves (POR) work is still ongoing and promised to complete the process as soon as possible.
As part of its efforts to increase transparency, CoinSwitch unveiled a public dashboard to monitor the wallet activities of WazirX following the wallet disclosure. This tool allows users to track the movement of crypto assets in real-time, offering visibility into the exchanges to which WazirX funds have been transferred. Singhal confirmed that $72.13 million of the transferred funds were identified on Bybit, while $1.5 million had been moved to KuCoin.
However, WazirX criticised CoinSwitch for introducing the dashboard while not providing the same level of transparency regarding its reserves. A WazirX spokesperson called on CoinSwitch to build a real-time Proof of Reserves dashboard for its users, accusing the exchange of not offering the same transparency that it demands from others.
CoinSwitch's legal action against WazirX, which began in July, has drawn attention to the $9 million in assets trapped due to WazirX's halted withdrawals. Singhal noted that these funds represent less than 1% of CoinSwitch's total holdings. The dashboard launched by CoinSwitch aims to help crypto investors navigate the aftermath of WazirX's wallet disclosure and cyberattack.