WazirX users frustrated by technical hiccups as INR withdrawals begin

Indian cryptocurrency exchange WazirX has finally allowed its users to withdraw some of their INR balances, but the process has been problematic for its customers.

Over a month after a hack drained $235 million from the Mumbai-based cryptocurrency exchange, the exchange has initiated the first phase of its INR withdrawal process.

The announcement from WazirX’s official X account on Aug. 26 claims that eligible users can withdraw 33% of their INR balance with the exchange.

To provide users with some relief, the platform has also slashed its withdrawal fees by 60%, from INR 25 (roughly $0.30) to INR 10 ($0.12).

The plan to restore INR balances was announced on Aug. 23, after the exchange restored user balances to what they were on July 18, 2024, at 1 PM IST.

This involved rolling back all trades made on the exchange on the date of the hack and when the platform suspended withdrawals on July 21. 

In its plan to restore user balances, WazirX said users could withdraw 66% of their INR balances in two phases of 33% each.

The first phase would be live from August 26 to September 8, and the second phase would begin on September 9 and run till September 22.

Customers face hurdles

The resolution wasn’t well received by the community, with many criticising the exchange for the delay and only being able to withdraw a small chunk of their balances.

Making matters worse, when INR withdrawals finally went live, several users reported technical issues.

Multiple WazirX customers reported not being able to withdraw funds hours after the exchange initiated the first phase.

One user whose withdrawal request was stuck suggested that reaching out to support did not bear any fruit, as they were asked to wait for a transaction to be cancelled.

Another conversation hinted at foul play, pointing out that those with INR balances were receiving a “temporarily unavailable” prompt on the withdrawal page; however, those with close to zero balances had no trouble proceeding with the withdrawals.

Some users also complained about being asked to redo their Know Your Customer (KYC) verification process on their already verified accounts.

A user cannot withdraw INR or crypto balances on the exchange without completing the process.

Further, the re-verification process would also take between 6-24 hours, as reported by one user facing the same issue.

Majority of funds remain frozen

The exchange’s recent troubles follow the announcement of a restructuring plan under Singapore’s insolvency laws and regulations.

This approach involves filing a “Scheme of Arrangement” in the High Court of Singapore, intended to provide WazirX with the legal framework and time to manage the distribution of remaining crypto assets equitably among users.

Typically, the legal framework will allow WazirX to modify the terms of its existing debt, such as extending payment timelines or reducing the total amount owed.

As such, it provides the company with a legal mechanism to avoid insolvency or liquidation.

However, whether or not the exchange takes this approach would depend on a community voting process.

This follows an earlier plan to distribute the cryptocurrency assets, which are still inaccessible to users, via a socialised loss distribution strategy, which was quickly dismissed.  

Wazirx has also disclosed that its parent company holds sufficient INR reserves to be able to cover all INR user balances, but 66% of those funds are frozen due to ongoing investigations by law enforcement agencies.

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