Crypto market is volatile, fortunes can be made and lost in the blink of an eye. Thus, safeguarding your assets becomes paramount.

The risk of losing those fortunes to hackers and scammers is a constant threat to crypto companies.

On July 18, 2024, WazirX, one of India’s largest crypto exchanges, faced a cyberattack on its multisig wallet managed by Liminal Custody, resulting in the theft of $230 million worth of digital assets.

The community has been quick to point fingers at WazirX.

As WazirX works tirelessly to recover the stolen assets, they’ve made a significant strategic move—filing a moratorium through Zettai Pte Ltd. in Singapore. But what drove this decision? Let’s explore the key reasons behind this crucial step.

Impact of the Cyberattack

The cyberattack left WazirX reeling, particularly because of Liminal’s oversight.
The theft of a large portion of ERC-20 tokens threw the platform into chaos, creating an imbalance between the platform’s token assets and users’ token balances.

Resuming normal operations without addressing this discrepancy could have put the remaining assets at risk. The moratorium offers Zettai a much-needed pause to stabilize the situation and devise a plan to move forward.

Need for a Well-Planned Recovery Process

WazirX launched a community poll offering two options for users to choose from. Unfortunately, the response was surprisingly underwhelming, failing to generate the positive engagement they had hoped for.

A hasty response could have led to even greater losses and legal complications as the stakes are high.

By seeking a moratorium, Zettai ensures that the recovery process is both systematic and legally sound. This step allows for the creation of a restructuring scheme that ensures the fair and equitable distribution of the remaining assets among all users in a legally binding manner.

Avoiding a Legal Situation

Without the protection of a moratorium, Zettai could have faced a wave of legal actions from creditors and users scrambling to recover their funds.

This chaotic scenario would have drained resources and hindered restructuring efforts. The moratorium acts as a shield, preventing enforcement actions during this critical phase and allowing Zettai the breathing room to develop a solution that benefits all stakeholders.

Aiming for Long-Term Stability

The moratorium isn’t just about managing the immediate crisis; it’s also about ensuring the long-term stability of the platform.

Through restructuring, Zettai plans to introduce mechanisms such as token recovery efforts, revenue-generating products, and partnerships. These initiatives are aimed at maximizing the value of the remaining assets, giving users a better chance of recovering their lost funds.

Zettai’s decision to file for a moratorium is a calculated move to protect both the platform and its users. It’s a strategic pause that allows for regrouping and restructuring, ultimately aiming for a more favorable outcome for all affected by the cyberattack.

As the process unfolds, the crypto community will be watching closely to see how WazirX navigates this challenge.