Coinspeaker
Crypto Exchange WazirX Shares Recovery Roadmap after $235M Hack
WazirX, the Indian crypto exchange that suffered a $235 million hack last year in July 2024, has charted a recovery path aimed at compensating the affected users. As per reports, the exchange built the restructuring plan under the supervision of Singapore’s legal system.
Last year in August 2024, WazirX’s parent firm Zettai filed for a moratorium at the Singapore High Court. The firm also proposed a restructuring plan as per the Singapore Scheme of Arrangement. A Singapore Scheme of Arrangement is a court-sanctioned legal procedure that enables companies to restructure their debts and obligations. Besides, it will also allow WazirX to present a binding agreement with creditors, thereby facilitating a resolution and avoiding liquidation.
Hacked crypto exchange WazirX has stated that it holds liquid assets worth $566.4 million USDT, which is more than $546.5 million USDT in claims filed by users in July 2024. In order to address the outstanding claims, the firm has also introduced recovery tokens.
This will allow creditors to benefit from future profits generated by platform operations and recovered assets. Nichal Shetty, the founder of WazirX stated that the restructuring procedure is a step towards restoring their customers’ trust. He said:
“Our swift filing for the moratorium and application to the court for a Scheme process was a decisive step taken for the benefit of users so they can receive distributions as soon as possible. Token distributions will be made shortly after the Scheme is approved by creditors and sanctioned by the court […] my number one goal is to add more value than what was stolen.”
WazirX Plan for Returning User Funds?
The recent surplus that crypto exchange WazirX has against users claims is due to a strong bull run in the crypto market during 2024. WazirX faced a 45% asset shortfall in relation to its liabilities before the current bull run.
Source: WazirX
Crypto exchange WazirX announced that it will return user funds through token distributions. It expects to cover 75% to 80% of the account balances at the time of the cyberattack. Initial distributions will occur within 10 business days after the scheme is approved and effective.
Additionally, the exchange will address further creditor claims using recovery tokens. WazirX will periodically repurchase these tokens using profits from platform operations and the launch of a proposed decentralized exchange (DEX). Furthermore, the crypto exchange plans to leverage the DEX in order to generate additional profits and settle outstanding claims.
Competitors Are Capitalizing on the Hack
As WazirX plans its own recovery path, competitors like CoinSwitch are making a smart move to attract its rival’s customers. In order to support the victims of WazirX, CoinSwitch has announced a strong recovery fund.
On January 7, CoinSwitch announced via X the launch of its “CoinSwitch Cares” recovery fund, valued at 600 crore Indian rupees ($69.9 million), aimed at assisting with the recovery of funds lost in the WazirX hack.
Additionally, CoinSwitch is pursuing legal action against WazirX to recover 2% of its funds, which are currently stuck on the platform, totaling 12.4 crore rupees ($1.44 million).
Crypto Exchange WazirX Shares Recovery Roadmap after $235M Hack
