Quick Summary: In a complicated case involving online attacks and digital money, the Bombay High Court made a decision about a disagreement between Zanmai Labs and Bitcipher Labs. The court agreed with a previous decision that required Zanmai to protect assets affected by a cyber theft, even though Zanmai didn't agree with it.
Zanmai Labs, known for running the WazirX trading platform, faced legal issues from Bitcipher Labs and Nextgendev Solutions. Both companies were affected by rules set by Zanmai after a cyber-attack on July 18, 2024. This attack compromised a large number of ERC-20 tokens, which were important to Bitcipher Labs.
Bitcipher Labs had put Rs.5 crores with Zanmai for trading, but shortly after, Zanmai limited access to user assets, saying it was because of the cyber-attack. The attack caused a huge loss, about USD 235 million, and Zanmai claimed the attack was out of their control.
"Zanmai put a lot of rules on how users could access their assets on the WazirX Platform, including rules on taking out their money."
The group making the decision first told Zanmai to protect the affected amounts by setting aside Rs. 45.38 crores for Bitcipher Labs and Rs. 11.92 crores for Nextgendev Solutions. Zanmai disagreed with these orders, but the group stuck to their decision after looking at new information.
Zanmai said that the responsibility for the cyber-attack was with Binance, a party involved in the User Agreement, who had bought WazirX in 2019 but later distanced itself. Zanmai claimed they were being blamed for things that Binance was supposed to handle.
"Zanmai argued that Binance had 'bought' the WazirX Platform in 2019, which led to the three-way contract."
Justice Somasekhar Sundaresan looked at the contracts and found that the agreement between Zanmai and Bitcipher Labs made Zanmai the same as WazirX. Even though Binance was involved earlier, the court held Zanmai responsible for protecting the assets.
The court noted that Zanmai's idea to "share" the losses among all users was not supported by the contracts and rejected this idea.
"The term is just a suggestion to spread the losses from the cyber-attack across many users of the platform."
The court rejected Zanmai's requests, supporting the orders from the group that made the decision. It stressed that Zanmai needed to protect the assets and did not support the idea of spreading the impact of the cyber-attack across all users without clear agreements.
This case shows how tricky managing digital money can be and the importance of having clear agreements in the fast-changing world of crypto.
