In July 2024, Indian cryptocurrency exchange WazirX faced a devastating $235 million cyberattack, reportedly orchestrated by North Korea’s Lazarus Group. In response, the exchange has implemented a comprehensive restructuring plan to restore operations and compensate affected users.
Singapore-Backed Restructuring Plan
WazirX’s parent company, Zettai, filed for a moratorium with the Singapore High Court in August 2024, seeking approval for a Singapore Scheme of Arrangement. This court-supervised legal framework enables companies to restructure debts and liabilities without liquidating assets.
As part of this plan, WazirX reported liquid assets of $566.4 million USDT, surpassing the total claims of $546.5 million USDT filed by users. The company has also introduced recovery tokens, offering creditors the potential to benefit from future platform profits and recovered assets.
Focus on User Recovery
Founder Nischal Shetty emphasized the swift action taken to safeguard users, stating:
“Our number one goal is to return more value than what was stolen. Distributions will begin shortly after court approval.”
The initial token distributions, covering 75–80% of users’ account balances, are expected within 10 business days of the scheme’s approval. Remaining claims will be addressed via recovery tokens, repurchased periodically using profits from platform operations and a proposed decentralized exchange (DEX).
CoinSwitch Steps In
Competitor CoinSwitch has launched a ₹600 crore ($69.9M) recovery fund, dubbed “CoinSwitch Cares”, to support WazirX victims. The company has also initiated legal proceedings to recover ₹12.4 crore ($1.44M) stuck with WazirX.
The Road Ahead
WazirX aims to rebuild user trust through its recovery initiatives while leveraging future innovations like the DEX to settle liabilities. This incident underscores the importance of robust security measures and contingency planning in the evolving cryptocurrency landscape.
