Indian crypto exchange WazirX charts the way back after a $235M cyber attack
Indian cryptocurrency exchange WazirX, which suffered a $235 million cyber attack in July 2024, has announced a restructuring plan aimed at compensating affected users.
The exchange, which was targeted by North Korea's Lazarus Group, has brought its scheme under the scrutiny of Singapore's legal system.
Wazirx's parent company, Zeti, has filed a restructuring plan in August 2024 with the Singapore High Court to be granted a grace period under Singapore's reorganization plan.
A Singapore scheme of arrangement is a court-approved legal process that companies can use to restructure their debts and liabilities. It allows a company to enter into a binding agreement with creditors, ensuring solvency by avoiding liquidation.
WazirX, in an affidavit shared with Cointelegraph, revealed that it currently holds liquid assets worth $566.4 million (USDT), exceeding the total claims of $546.5 million USDT submitted by users in July 2024.
The company introduced recovery tokens to settle outstanding claims, allowing creditors to benefit from profits generated from future platform operations and recovered assets.
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Focus on recovery
WazirX founder Nishal Shetty described the restructuring as a step to restore user confidence.
“Our speedy filing of the suspension process and the court's scheduling process was an important step taken in the interest of consumers,” Shetty told Cointelegraph. “Token distributions take place shortly after the scheme is approved by creditors and approved by the court. […] My number one goal is to add more value than what is stolen.
WazirX had a 45% shortfall in assets compared to respondents, before the next bull run. Source: WazirX
The company said it will return funds in token distributions, which could amount to 75 percent to 80 percent of users' account balances at the time of the cyber attack.
The initial distribution will be completed within 10 business days after the plan is approved and implemented.
The rest of the creditors' claims are represented by Recovery Tokens, which are periodically purchased through the profits generated from the platform's operations and through a proposed decentralized exchange (DEX).
WazirX plans to launch DEX to generate additional profits and settle pending claims.
Related: Crypto hacks, fraud losses hit $29 million in December, lowest in 2024
CoinSwitch makes it big on hacking
CoinSwitch, an Indian cryptocurrency exchange and WazirX competitor, has announced a recovery fund aimed at supporting victims of the WazirX cyber attack.
CoinSwitch took to X on January 7 to officially announce the launch of a 600 crore Indian rupee ($69.9 million) WazirX hack recovery fund, the company's recovery fund called “CoinSwitch Cares”.
CoinSwitch is taking legal action against WazirX to recover 2% of the funds tied to WazirX, totaling 12.4 crore rupees ($1.44 million).
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