WazirX creditors are to decide whether to begin receiving their stolen crypto as early as April 2025 or face an extended recovery timeline until 2030. The decision will be based on a voting outcome that will take place in the coming weeks.
WazirX illustrated the likely outcomes for creditors affected by the hack on the X platform through a photo. The crypto exchange’s creditors will participate in a ballot to determine whether the firm will restructure.
If three-quarters of the creditors vote yes, the scheme will become effective in two months. As approved by a Singapore court, it will be up and running by April.
Two paths, two very different outcomes.
Here's a breakdown of what happens if the Scheme is approved versus if it isn't. Understand what to expect in both scenarios as we approach the voting process. pic.twitter.com/ZcXpC8g79Q
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) February 4, 2025
The refund plan has various elements, including launching a decentralized exchange (DEX), giving out recovery tokens that can be traded, and conducting a periodic buyback of recovery tokens using gains from the platforms while exploring new revenue streams.
If three-quarters of the creditors won’t vote yes, liquidation will be the option
According to the WazirX post, the liquidation process will be slow and less favorable to the creditors if they vote no.
WazirX problems began in July 2024 when the North Korean hacker Lazarus successfully breached the exchange platform and stole over $230 million of users’ funds. The attack dealt a severe blow to the platform, causing the once-largest crypto exchange in India by trading volume to decline significantly.
The criminals proceeded to launder all the stolen assets to various addresses using Tornado Cash to hide the transaction footprints, leaving the exchange without any hope of fully recovering the stolen money.
The exchange’s failure to recover the lost funds and unsuccessful attempts have drawn severe criticism over its handling of the crisis.
The Indian government recently decided to apply a 70% penalty on any undisclosed gains on crypto, which has dampened the spirits of WazirX users. This decision could pose tax implications that may be rather nuanced and surprise many investors, all due to the token distribution by WazirX management.
The exchange decided to seek a moratorium and court approval for a restructuring plan to facilitate creditor recovery and avoid total liquidation. This came about after WazirX faced many problems, including criticism for poor communication with users and ineffective fund recovery.
Singapore High Court gives WazirX a greenlight to restructure
Last month, the High Court of Singapore approved the WazirX restructuring plan. The court supported restructuring over liquidation.
WazirX estimates that users may recover up to 80% of their balances under this structure. The exchange plans to repay affected users by introducing recovery tokens representing claims and allowing creditors to benefit from recovered assets and future platform profits.
The proposal has provoked the anger of Indian crypto users, who blame WazirX co-founder Nischal Shetty for controlling the process to make them obey. A number of users noted that there has never been a single time when WazirX was secure and didn’t hide something, so it is hard to believe that yet another project by the exchange will be different.
Some people think that the five-year delay is a fear tactic to make users accept the new DEX model instead of a real recovery option.
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