WazirX has approached former partner Binance to help bail out customers affected by the $230 million cyber attack. Industry sources said Money control That Binance controls the revenue of WazirX and the surplus of its WRX token.

As of the date of the hack, i.e. July 18, Binance had approximately $80 million worth of WRX tokens. This, inadvertently, affected Minister X’s ability to use his funds to return part of the client’s assets, according to a source cited above.

“Their legal dispute is still ongoing. There are some components of WazirX’s business that are still under Binance’s control, including revenue — its surplus. Even its WRX token is under their control. So that Binance have been reached and talks are on but in the early stages,” the sources said.

“They are in a sandwich situation right now,” the source added.

A May 2023 WazirX blog post stated that “The WRX token is controlled by Binance. The IEO (Initial Exchange Offering) for WRX was conducted by Binance, and all proceeds from the WRX IEO sale (i.e. $2 million 108,401 BNB tokens worth) collected and held by Binance.”

“Furthermore, wallets holding locked and issued WRX tokens are also managed and controlled by Binance, including the issuance of such tokens based on the WRX release schedule,” it added.

Minister X declined to comment on the development, and Binance has yet to return questions sent by email. Money control. Any responses to these exchanges will be updated to reflect the article.

Legal dispute

The dispute between the world’s largest crypto exchange Binance and the country’s largest exchange WazirX began again in August 2022, when the Enforcement Directorate (ED) allegedly helped a group of accused money lending apps. Bank assets worth Rs 64.67 crore were frozen by Minister X. Laundering and fraud through the transfer of virtual crypto-assets.

Afterwards, Binance CEO Changpeng Zhao (CZ) took to X (then Twitter) to clarify that his firm has no equity in WazirX and does not control its operations.

It came as a shock to investors as differences between the founders escalated on social media. As of 2019, it was known that WazirX was acquired by Binance via a Binance blog post on November 21, 2019.

According to a report by Coin Desk As of January 2023, Binance previously clawed back more than $67 million it had earned through trading fees on the WazirX platform, citing a letter sent by Shetty to Binance’s legal team and CZ.

Recovery plan

It has been done. 10 days after the hackand WazirX is currently exploring possible ways to mitigate the effects of the theft and restart the platform, which temporarily halted withdrawals and trading.

About 33 percent of Indian crypto users have accounts and balances with WazirX. The exchange lost 45 percent of its assets in this recent security breach.

One of the proposed solutions has already faced heavy pressure from users. The exchange had made a proposal. 55/45 approach or socialization of losses, in which regardless of whether a user’s assets were stolen, they would be able to access and trade approximately 55 percent of their portfolio tokens, as the exchange resumed trading on the platform. has given

Further, the exchange has given users two options to choose from. They will be able to vote for the same till August 3.

Users described this as ‘unfair’ as 45% of their remaining tokens would be converted to stablecoins (USDT) and locked, whatever tokens currently held by users. This can bring down their overall crypto portfolio value.

Also read: Minister X’s $230 Million Hack Will Stop Crypto Industry Growth With Regulators