WazirX Secretly Moves Funds Out of Bybit Post $1.5 Billion Hack: No Explanation Provided

If you’re a WazirX user, you might be feeling left in the dark. Following the massive $1.5 billion Bybit hack on February 21, 2025, WazirX clandestinely withdrew ₹606 crore from Bybit, leaving its users with more questions than answers.

• Bybit hack results in $1.5 billion loss
• WazirX moves ₹606 crore out of Bybit
• WazirX users unable to withdraw funds since July 2024 hack

Bybit Hack Details

The Bybit hack shook the crypto world, resulting in a staggering $1.5 billion loss. Bybit, a major player in the cryptocurrency exchange arena, confirmed the breach but quickly reassured users that client assets were 1:1 backed, meaning for every dollar in user funds, Bybit holds a dollar in reserve. This swift action and clear communication helped Bybit maintain its solvency and trust among users. However, not all exchanges responded with the same level of transparency and responsibility.

WazirX’s Response

In a move that left many scratching their heads, WazirX, a leading cryptocurrency exchange in India, secretly withdrew ₹606 crore from Bybit just a day after the hack. This action came without any explanation to its users, despite WazirX having previously transferred user funds to Bybit, an exchange that was not registered with India’s Financial Intelligence Unit (FIU) at the time. The lack of communication from WazirX has been a slap in the face to its users, who are already struggling to access their funds.

Impact on Users

WazirX users have been unable to withdraw their funds since a ₹2,000 crore hack in July 2024, leaving them in limbo for over seven months. Despite this, WazirX has remained silent, offering no updates or transparency on the matter. This situation echoes the challenges faced by exchanges like Mt. Gox and Bitfinex in the past, highlighting the need for swift action and clear communication in the crypto space. Rajesh, a WazirX user since 2022, tells us, “I’ve been waiting for months to access my funds. The silence from WazirX is deafening.”

Industry Implications

While WazirX grapples with its issues, competing Indian exchanges CoinDCX and CoinSwitch have assured their users that they were unaffected by the Bybit hack. Bybit’s quick response in restoring withdrawals within two days stands in stark contrast to WazirX’s prolonged inability to allow user withdrawals. This situation highlights what distinguishes responsible exchanges from others in the crypto community.

Regulatory and Security Concerns

The FBI’s recent call for blockchain entities to block transactions linked to North Korean actors related to the Bybit hack adds another layer of complexity. This international security concern could prompt regulatory bodies in India to impose stricter controls on crypto exchanges, potentially affecting WazirX’s operations and user access to funds. The looming threat of increased regulation only adds to the urgency for WazirX to address its current issues.

The Importance of Transparency

Transparency is the lifeblood of the crypto ecosystem. Proof of reserves, a method by which crypto exchanges demonstrate that they hold the assets they claim to have on behalf of users, is crucial for maintaining trust. WazirX’s lack of transparency, including its failure to publish a live proof of reserves, has drawn sharp criticism from the crypto community. Crypto analyst Aditya Singh, who has been vocal about WazirX’s shortcomings, stated:

“WazirX had user funds on Bybit Exchange which they withdraw yesterday after the Bybit hack. Imagine if Bybit didn’t cover losses. What would have happened. This is another reason I have been asking Nischal to publish Live POR but Nischal Blocked me and till this date they have not published it.” – Aditya Singh, crypto analyst

Nischal Shetty, co-founder of WazirX, has remained silent on the issue, focusing instead on other projects like Shardeum and Web3. This silence, coupled with WazirX’s secretive fund movements, raises serious concerns about the exchange’s priorities and its commitment to its users.

What WazirX Should Do

WazirX has hinted at a voting process for a restructuring scheme, aiming to unlock 55% of user crypto assets for trading or withdrawal, while locking 45% to be converted into a stablecoin called USDT. Yet, no progress has been made, leaving users in limbo. To regain user trust, WazirX must take immediate action:

• Provide clear communication about the status of user funds.
• Publish a live proof of reserves to demonstrate the security of user assets.
• Work swiftly to restore user access to their funds.

WazirX, it’s time to break the silence. Your users deserve transparency and action, not more excuses.

Key Takeaways and Questions

• What was the impact of the Bybit hack?

  The Bybit hack on February 21, 2025, resulted in a loss of $1.5 billion, making it one of the largest crypto hacks ever.

• How did WazirX respond to the Bybit hack?

  WazirX secretly moved ₹606 crore out of Bybit a day after the hack without providing any explanation to its users.

• What is the current status of WazirX user funds?

  WazirX users have been unable to withdraw their funds for over seven months since a ₹2,000 crore hack in July 2024, with no updates or progress from the exchange.

• Why is transparency important for crypto exchanges?

  Transparency, including proof of reserves, is crucial for maintaining user trust and ensuring that user funds are secure and properly managed.

• What distinguishes responsible exchanges from others?

  Responsible exchanges like Bybit quickly restore operations and communicate clearly with users, whereas exchanges like WazirX have failed to address user concerns or provide transparency.

• What should WazirX do to regain user trust?

  WazirX should provide clear communication, publish proof of reserves, and work swiftly to restore user access to their funds.

The crypto community thrives on the principles of decentralization, privacy, and disrupting the status quo. WazirX’s actions, however, undermine these values by neglecting user trust and transparency. As we watch the unfolding drama, it’s clear that WazirX must address these issues head-on to secure its future in the dynamic world of cryptocurrency.