WazirX Creditors May Soon See Recovery of Stolen Crypto
Creditors of the compromised Indian cryptocurrency exchange, WazirX, may begin receiving their stolen digital assets as early as April or potentially as late as 2030, depending on the results of an upcoming voting process. This crucial vote is set to take place in the coming weeks, where creditors will decide whether to approve a proposed restructuring scheme.
If a majority—specifically, over 75% by value of the voting creditors—approve the scheme, it would become effective in April 2025, as per the prior endorsement by a Singapore court, according to a recent announcement from WazirX on social media platform X.
Upon approval, the exchange plans to resume trading operations. Initial payouts are expected within ten business days following the activation of the scheme, which will include the distribution of net liquid assets to creditors.
The refund strategy also involves launching a decentralized exchange (DEX), issuing recovery tokens that can be traded, and conducting periodic buybacks of these recovery tokens using profits generated by the platform along with new revenue sources.
However, if the creditors do not approve the scheme, the restructuring initiative will collapse, pushing the process toward liquidation as stipulated under Section 301 of the Singapore Companies Act. This scenario could lead to a distress sale of assets, significantly diminishing the compensation that creditors might receive, as assets may be sold off at potentially lower market values.
WazirX has cautioned that such a liquidation process could be less advantageous for creditors due to inevitable delays and the likelihood of reduced asset valuations.
Once recognized as India’s leading cryptocurrency exchange by trading volume, WazirX faced a major setback when it was hacked by the notorious North Korean hacker group, Lazarus, in July 2024. This breach resulted in the theft of over $230 million in user funds. The hackers subsequently laundered the stolen cryptocurrency through various addresses using Tornado Cash, obscuring the transaction trails and further complicating recovery efforts, as reported by CoinDesk in September.
WazirX, grappling with the extensive financial and reputational repercussions of the hack, has made attempts to recover the lost funds but has encountered limited success. The exchange has faced criticism regarding its crisis management, particularly concerning communication with users and the recovery of their funds. To navigate this challenging situation, WazirX filed for a moratorium in Singapore courts and successfully secured court approval for a restructuring plan in January aimed at creditor recovery, thus averting total liquidation.
