India’s leading cryptocurrency exchange, WazirX, along with its infrastructure partner Liminal, and associated entities are entangled in a legal battle following a significant crypto asset theft amounting to $230 million. The petition, lodged with the National Company Law Tribunal (NCLT), seeks an investigation into the companies’ affairs, citing potential mismanagement, malpractices, or fraudulent activities.
NCLT Petition & Allegations
Sources indicate that the petition, filed in Indore on August 5th, invokes Sections 213(b) and 221 of the Companies Act, 2013. Section 213(b) empowers any individual to request an inquiry into a company’s operations if there are grounds to suspect misconduct. Moreover, under Section 221, the petitioner can seek a freeze on the company’s assets following an investigation.
The respondents named in the petition include WazirX, Liminal, its directors and founders, along with several government bodies such as the Ministry of Home Affairs, Ministry of Finance, Ministry of Corporate Affairs, and the Serious Fraud Investigation Office.
Case Filed by Law Student
The case was initiated by Gauransh Vyas, a law student from Indore and a legal intern with the Supreme Court of India, according to his LinkedIn profile.
WazirX & Liminal’s Response
In response to inquiries, a WazirX spokesperson acknowledged the petition and asserted that they are taking appropriate legal measures. They firmly denied any allegations of fraud and stated their intent to respond as per the legal procedure before the NCLT.
Similarly, a Liminal spokesperson confirmed their participation in the proceedings and expressed their commitment to defending their position vigorously.
WazirX’s $230 Million Hack & Aftermath
WazirX recently reported a cyberattack on one of its multisig wallets, resulting in the loss of 45% of its crypto assets, valued at $230 million. Cybersecurity experts have attributed the hack to the Lazarus Group, a North Korea-based hacking collective.
The incident has garnered international attention, with the US Federal Bureau of Investigation (FBI) urging WazirX to investigate the hack’s nature. The exchange has also shared its records with the Indian Computer Emergency Response Team (CERT-In) for further scrutiny.
In the wake of the hack, WazirX temporarily suspended trading and withdrawals on its platform. The exchange is actively exploring options to resume operations and compensate affected customers.
WazirX’s founder, Nischal Shetty, has been in discussions with global exchanges, including its former partner Binance, to seek support or a potential buyout. Sources suggest that Binance holds a substantial portion of WazirX’s revenue and WRX tokens, impacting the exchange’s recovery efforts. The two exchanges remain embroiled in a legal dispute.
Add Comment