Will Binance Cover the Losses From WazirX Hack? Here is What we Know
The exchange denied responsibility for the hack’s losses, Urges WazirX to take accountability.
On July 18, 2024, a hacker brazenly absconded with more than $230 million from WazirX, an Indian cryptocurrency exchange, marking the second-largest cryptocurrency heist of 2024 thus far.
The hacker targeted a multisig wallet managed by five members of the WazirX team, along with one signatory from Liminal, a third-party custodian, resulting in the loss of millions of dollars worth of user assets. Due to the hack, WazirX lost almost half of its funds, rendering the platform incapable of fulfilling customer withdrawal requests.
Following the attack, Zettai Pte Ltd, an entity linked to the exchange, sought a moratorium in Singapore’s High Court. This legal move has prevented WazirX’s creditors from taking collective action against it. WazirX users have consequently grown increasingly frustrated due to their inability to access their crypto assets.
Binance Denies Involvement
In response to the situation, Binance has denied any involvement in the WazirX hack, especially after misleading statements by Nischal Shetty, the co-founder and CEO of WazirX surfaced regarding the relationship between Binance and the Indian exchange.
On Sept. 17, Binance released an official statement addressing these allegations, stating:
“The efforts to deflect responsibility are regrettably disappointing; however, they should not divert attention from the prominent issue at hand: the imperative need to hold the WazirX team accountable for the loss of user funds under their management.”
Binance clarified that while it had provided wallet services to WazirX until January 2023, all funds were removed from Binance’s control at WazirX’s request. From that point on, WazirX and Liminal had full control over the funds, with zero involvement from Binance.
Although Binance and WazirX had previously discussed a potential acquisition deal, it never materialized. This left the ownership and control of the India-based exchange in the hands of Zanmai Labs Private Limited.
“Binance never acquired or controlled WazirX. Even though the parties had signed a contract, the deal never went through because Zettai didn’t fulfill its obligations. Binance has never owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack,” the statement further reads.
