WazirX, India’s largest cryptocurrency exchange, has put its users in a difficult position. Almost 6 months after a massive $235 million hack, it is asking users to make a hard choice: agree to a new recovery plan or wait until 2030 to get their funds back.
Two Straight Forward Paths for Creditors
WazirX’s latest plan has outlined two options for its users The first is to approve a new restructuring plan, which includes launching a decentralized exchange (DEX) and issuing recovery tokens.
If 75% of creditors vote in favor of the plan, the exchange will restart operations in April 2025, with initial payouts beginning within 10 business days. The recovery tokens can be traded, and the platform promises periodic buybacks using profits and new revenue streams.
The second option is far less appealing. If the plan is rejected, WazirX will move toward liquidation under Singapore’s Companies Act. This process could result in a fire sale of assets, potentially leaving users with significantly less compensation due to lower asset values and delays.
The proposal has sparked a lot of criticism, especially in the Indian crypto community. Many users feel that WazirX is pressuring them into accepting the new plan by threatening a long wait for recovery. They argue that the plan isn’t a real solution but a way for WazirX to benefit from the situation.
There are also worries about how the remaining funds are being used. Some users have claimed that money intended to reimburse them has been spent on legal fees, making the situation even more frustrating for those affected.
The Aftermath of the Hack
Wazirx was hacked in July 2024 by the North Korean group Lazarus. Over $230 million in user funds were stolen, with the hackers using Tornado Cash to obscure transactions.
The exchange, which lost over 40% of its assets during the hack, has kept operations suspended in hopes of finding a solution. But rather than simply offering a direct reimbursement, the exchange has tied the recovery process to a new business venture that has many of its users questioning the fairness of the approach.
