Bombay High Court Upholds CoinSwitch’s Right to Secure Funds on WazirX
- Zanmai Labs must provide bank guarantees of approximately $5.4 million (Rs 45.38 crores) to protect CoinSwitch‘s claims.
- The court rejected WazirX’s proposal to distribute losses among all users through its parent company’s restructuring scheme.
- Justice Somasekhar Sundaresan ruled Zanmai cannot avoid accountability by attributing cybersecurity responsibility to Binance under a disputed acquisition agreement.
- The judgment protects approximately $9.7 million of CoinSwitch funds frozen on WazirX, following a hack that stole $234 million worth of crypto from the exchange’s multi-signature wallets in July.
- A tribunal applied a haircut only to CoinSwitch’s ERC-20 token holdings while safeguarding other assets from loss distribution schemes.
The Bombay High Court has ruled in favor of CoinSwitch, allowing it to secure its assets held on the embattled WazirX platform after a major hack compromised the exchange’s security in July. This decision mandates Zanmai Labs, operator of WazirX, to provide substantial financial guarantees and dismisses their attempt to shift cybersecurity blame onto Binance.
This ruling ensures that CoinSwitch can recover its frozen funds without incurring losses due to Zettai’s proposed restructuring plan, reinforcing accountability for asset custody agreements and protecting creditor interests against forced loss distribution schemes. (Source)
