WazirX, its infrastructure partner Liminal, and other related organizations are experiencing legal issues as a result of a $230 million large crypto asset heist. On August 5, a petition citing Sections 213(b) and 221 of the Companies Act, 2013 was submitted to the National Company Law Tribunal (NCLT) in Indore.
If a firm is suspected of mismanagement or fraudulent activity, Section 213(b) permits inquiries into its affairs, and Section 221 permits the freezing of the company’s assets during such investigations.
The respondents in the petition include the Ministry of Home Affairs (through the principal secretary), the Ministry of Finance (through the principal secretary), the Ministry of Corporate Affairs (through the principal secretary), WazirX, Liminal, its directors and founders, as well as the serious fraud investigation office.
According to information on the NCLT website, Gauransh Vyas, an Indore law student, filed the complaint. His LinkedIn page states that he is an intern lawyer at the Indian Supreme Court.
A WazirX spokesperson confirmed their awareness of the petition filed with the NCLT in Indore. The spokesperson stated that the company is actively pursuing necessary legal measures and strongly refutes all allegations of fraud.
Due to the ongoing legal nature of the proceedings, detailed discussions about the petition are not possible at this time. WazirX plans to follow the legal process as outlined by the NCLT, which will assess the petition’s validity based on legal principles.
A Liminal spokesperson confirmed their participation in the court proceedings and stated that, as the matter is sub judice, they are not making further comments at this time. They assured that Liminal will continue to defend its position vigorously.
WazirX filed an FIR on August 6 after losing $230 million in a July 18 cyberattack attributed to the Lazarus Group. The hack led WazirX to temporarily suspend trading and withdrawals while exploring ways to restart the platform and compensate users.
Amidst backlash against a proposed plan to socialise losses, founder Nischal Shetty is negotiating with global exchanges, including Binance, for support or a buyout. The ongoing legal dispute with Binance, which holds significant control over WazirX’s revenue and WRX tokens, is complicating the bailout process.
