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>>The Bombay High Court ruled in favor of CoinSwitch, rejecting WazirX’s claim regarding responsibility for a 2024 security breach.

The Bombay High Court ruled in favor of CoinSwitch, rejecting WazirX’s claim regarding responsibility for a 2024 security breach.

crypthub

about 24 hours ago

Court Ruling on WazirX-CoinSwitch Dispute

The Bombay High Court dismissed WazirX’s appeal regarding CoinSwitch’s claim for assets lost in a $234 million cyberattack. The court upheld an arbitration order requiring Zanami Labs, WazirX’s operator, to provide bank guarantees to secure CoinSwitch’s losses. The ruling affirmed that the tribunal acted within its authority and that securing CoinSwitch’s claim was appropriate given the scale of the breach. WazirX had argued that Binance was responsible for the cybersecurity failures, but this claim was rejected.

Details of the Hack and CoinSwitch’s Losses

Hackers breached WazirX’s multi-signature wallets in July 2024, utilizing a fake account to deposit and purchase tokens. The attackers subsequently manipulated smart contracts, gaining full control and draining funds from both hot and cold wallets. CoinSwitch, which held broker accounts with WazirX, suffered significant financial losses due to the attack, leading them to pursue arbitration. The bank guarantees are intended to cover these losses.

Restructuring and Future Implications

WazirX is complying with a Singaporean court order related to its restructuring case following the cyberattack. The company has initiated a $70 million recovery program to compensate affected users, distributing funds in INR or crypto. The High Court is expected to schedule a hearing to address the final details of the case, impacting WazirX’s restructuring and ability to recover.