CoinSwitch Sues WazirX Over Locked Funds After Cyberattack

In a major event in India’s copyright space, CoinSwitch, a leading copyright exchange, has filed a lawsuit against its competitor, WazirX. CoinSwitch is seeking to recover $9.65 million in assets stuck on WazirX's platform after a major cyberattack. This incident highlights the growing challenges for Indian copyright companies.

The Dispute Between CoinSwitch and WazirX

In July 2024, WazirX, one of India’s top copyright exchanges, was hit by a cyberattack, leading to a loss of about $230 million (₹1,900 crore). Among the victims was CoinSwitch, which had assets worth ₹810 million ($9.65 million) trapped on WazirX. These include ₹124 million in fiat currency, ₹287 million in ERC20 tokens, and ₹399 million in other cryptocurrencies.

Failed Recovery Efforts Lead to Legal Action

CoinSwitch made several attempts to recover its funds, but received no response from WazirX. After over a month of trying, CoinSwitch decided to take legal action to prevent further losses, as WazirX is undergoing a restructuring process. CoinSwitch hopes the court will help speed up the recovery of its assets.

WazirX's Response: Restructuring and Moratorium

WazirX’s parent company, Zettai, has filed for a moratorium in the Singapore High Court. This allows them time to restructure their debts and come up with a plan to return some assets to users. The restructuring process is expected to take at least six months.

Impact on the Indian copyright Industry

The battle between CoinSwitch and WazirX highlights the struggles facing India’s copyright industry. Already dealing with unclear regulations, the sector has been shaken by security breaches. Despite this, CoinSwitch has reassured its users that the trapped assets account for less than 1% of its total holdings and that its operations remain unaffected.

Conclusion

The outcome of this case could set an important precedent for India's copyright future. While CoinSwitch works to recover its assets, WazirX is focused on restructuring. The entire copyright community in India will be closely watching how this unfolds.