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WazirX faced a major cyberattack in July 2024, resulting in the theft of about $230 million worth of cryptocurrencies. This incident led to suspension of trading on the platform and curbs on investors to withdraw their holdings.
Justice Sachin Datta had issued similar notices to the RBI and the Securities and Exchange Board of India among others last week on another petition that flagged serious concerns about a financial crisis allegedly impacting users of BitBNS cryptocurrency exchange. BitNS recently faced scrutiny after users reported of frozen withdrawals, thus leading to filing of a petition for stringent cryptocurrency regulation and a probe into the exchange's operations.
On Wednesday, Justice Datta said WazirX will have to pay the money if the fault was at its level. "If someone from the dark web breached your platform, you cannot say sorry...I am curious to know if the government will wash its hands of in its affidavit," the judge said.
While the RBI told the court it will not regulate platforms such as WazirX, Justice Datta termed the banking regulator's stand as "unfortunate".
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"You (RBI) may turn a blind eye to crypto, it could threaten the financial system of the country. What are you doing to regulate that," the judge asked.
After the cyberattack in July, WazirX had moved an application before the Singapore High Court to present and vote on a restructuring plan to provide a fair and quick recovery for investors whose cryptocurrency was locked up.
