Petition filed with NCLT over WazirX $230 million crypto asset theft

The petition has been filed by a Supreme Court law intern named Gauransh Vyas on August 5 in Indore, the report said citing details available on the NCLT website.

Sources informed Moneycontrol that the petition, filed on August 5 in Indore, invokes Sections 213(b) and 221 of the Companies Act, 2013. Section 213(b) allows individuals to request an investigation into a company's affairs if there is suspicion of mismanagement, malpractices, or fraudulent activities.

Section 221 enables the petitioner to request the freezing of the company's assets during the inquiry and investigation.

“Emails have been sent to all the respondents notifying the same,” a source privy to the developments said.

In addition to WazirX, Liminal, and its directors and founders, the petition also names the Ministry of Home Affairs via the principal secretary, the Ministry of Finance via the principal secretary, the Ministry of Corporate Affairs via the principal secretary, and the Serious Fraud Investigation Office as respondents.

“We are aware of the petition filed against us before the NCLT, Indore and we are taking necessary legal action. We strongly deny any and all allegations of fraud. Since it is an ongoing legal proceeding, we cannot discuss the details of the petition,” WazirX spokesperson said.

“We will respond as per the prescribed procedure under law before the NCLT. The NCLT will decide the weight of the petition on legal grounds,” the spokesperson added.

According to the report, a Liminal spokesperson said, "Liminal's representative was part of the proceedings and has duly appeared before the court. As this matter is now sub judice, we are refraining from making any further comments at this time. However, we will continue to defend our position vigorously."

WazirX filed a first information report (FIR) with the PS Special Cell, PS Lodhi Colony in New Delhi on August 6 regarding the hack.

Background

WazirX, India's largest crypto exchange, hosts accounts and balances for nearly 33 percent of Indian crypto users.

Cybersecurity firm Cyfirma has linked the hack to the Lazarus Group, a state-sponsored hacking collective from North Korea.

The incident has garnered significant international attention, leading the US Federal Bureau of Investigation (FBI) to urge WazirX to conduct a thorough investigation into the nature of the breach.

Sources informed Moneycontrol that Binance controls a substantial portion of WazirX’s revenue and around $80 million worth of WRX tokens, which is complicating WazirX's bailout plans. Both exchanges remain entangled in a legal dispute.