WazirX gets Singapore Court greenlight to repay $235M hack victims

WazirX users are in recovery mode. The Indian crypto exchange confirmed that it had received approval from a Singapore court to repay customers for any funds that were not stolen in the hack last year. 

Last July, WazirX lost $235 million in customer funds. After the hack, customers panicked and began to withdraw funds. The crypto exchange opted to freeze all trading and withdrawals on the platform while it worked to resolve the issue.

Zettai, WazirX’s parent business, is headquartered in Singapore. Therefore, the exchange had to seek court authority in the country to pay off its clients.  

The approval includes steps like restructuring WazirX’s debts to benefit customers. It will also create recovery coins to help return money to customers. 

WazirX consumers aren’t content yet. Why? Before the money can be distributed, more than half of the 4.2 million hack victims must vote in favor of its restoration. The voting procedure will be overseen by an impartial institution and should take place within three months of the court’s decision

Moreover, the creditors’ meeting will be held online, and then voting on the planned plan will happen electronically. The company said it will soon inform creditors about the terms of this process.

All news media outlets reported that Wazirx Got approval from the Singapore court to proceed with voting and most feel they will get funds by April-March.

But all of them missed that Wazix is asking for an additional 4 months from the court. pic.twitter.com/9XQQNYNVNj

— Aditya Singh (@CryptooAdy) January 23, 2025

The firm said, “This decision is a significant step in Zettai’s efforts to distribute assets associated with WazirX to users and to revive operations of the platform.”  However, the company has asked for an additional 4 months from the court.

WazirX to use recovery tokens (RTs)

The proposed plan aims to offer liquidity and additional recoveries to WazirX users through rebalancing and tokenization. As part of the plan, WazirX will release liquid assets worth $28M and issue RTs to all its users upon approval and sanction of the scheme.

RTs will be given to scheme creditors based on the value of their claims compared to the total value of all claims. RTs show how much each Scheme Creditor owns of the Illiquid and stolen assets. 

The Company will pay back shared gains and return illiquid and stolen assets to creditors. They will do this by buying back issued RTs during the Scheme.

How will the creditors benefit from RTs? RTs will let Scheme Creditors benefit from any price increases in illiquid and stolen assets. If the value of illiquid and stolen assets goes up, the company will need to give more money back to creditors.

WazirX will achieve this through profit sharing and recovered assets to meet its payment obligations to Scheme Creditors. This means that any benefits or profits go to the creditors instead of the Company. 

Does a rise in liquid asset value impact the effort to recover stolen assets? Well, no. The rise in the value of flexible assets does not reduce the dedication to recovering stolen assets. The plan describes how the company is working to find and collect these assets. This is done while distributing the adjusted liquid assets to scheme creditors.

WazirX Plans to reopen exchange in February 2025

In November 2024, WazirX’s co-founder Nischal Shetty told users at a town hall meeting that things were getting better and that trade might start again in February 2025. Apparently, freezing some of the stolen stablecoins is a significant step towards rebuilding trust. 

They will also be part of the funds used to compensate users who were affected. In addition, the exchange plans to incorporate new features and services to generate revenue in 2025.

The notorious Lazarus group is allegedly to blame for WazirX’s troubles. The U.N. reports observed that North Korea stole $3 billion in crypto from 2017 to 2023 to pay for its banned nuclear weapons programs. Recent statistics revealed that North Korean hackers stole 61% of all crypto in 2024, amounting to $1.34 billion.

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