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Crypto exchange WazirX has offered victims of its $235 million hack a chance to recover their funds through a proposed restructuring plan, but the timeline hinges on creditor approval.
According to a February 4 announcement from what was once one of India’s largest cryptocurrency trading platforms, creditors have two options, one of which could delay repayments until 2030.
The Mumbai headquartered exchange got its recovery plan approved by a Singapore High Court on January 23, after it applied for court-supervised restructuring to avoid liquidation.
The plan was approved under the under the Company’s Act. 1967, which regulates and sets guidelines on the operation of companies in India.
Option 1
Under the first plan, if the creditors approve the current restructuring proposal, the exchange could begin the first round of the repayment process as early as April 2025 using a profit-sharing model and by recovering stolen and illiquid wallet assets.
As a part of its recovery efforts, the exchange plans to issue recovery tokens to affected users alongside a new decentralized exchange, with a portion of the fees generated set to be used to fund recovery efforts.
WazirX plans to leverage additional revenue streams by introducing new offerings, such as crypto staking, an OTC desk, and a futures trading platform, to fund repayments.
A portion of the exchange’s future revenue would also be allocated toward a buyback program for its recovery tokens to help users recover more of their lost assets over time.
WazirX will also explore partnerships with white knight investors and external backers willing to inject fresh capital into the business to support restructuring efforts.
Meanwhile, it will sell tokens held by third parties and collaborate with law enforcement to recover stolen and illiquid assets, ensuring that funds are secured for creditor benefit.
The decision to proceed rests on creditors, who have three months to vote on the restructuring plan.
If a majority approval is reached, WazirX will distribute net liquid assets within 10 days of the vote’s conclusion.
Option 2
If the plan is rejected, however, repayments could be delayed until 2030, as creditors would have to wait for ownership disputes to be settled before any assets can be distributed.
The ownership dispute centers on the contested acquisition of WazirX in 2019 by Binance, a leading global cryptocurrency exchange.
Binance has reiterated that the acquisition was never completed and that it did not own any equity in Zanmai Labs, the entity operating WazirX.
WazirX has indicated that due to the nature of its acquisition agreement with Binance, its Singapore-based parent entity, Zettai Pte Ltd, does not capture the revenue or profits generated on the platform and thus cannot contribute to the recovery process.
Another risk involved with the second option is that if WazirX is forced into liquidation before the ownership dispute is resolved, asset distributions would be significantly delayed and subject to additional legal and administrative costs.
The exchange has warned that going down that route could lead to lower fiat payouts, and creditors might receive only a fraction of their original holdings.
Disgruntled users, in the meantime, did not seem happy about the company forcing their hands, with many calling out the restructuring plan a scam.
🚨 WazirX is forcing users into a scam! 🚨 They want you to accept a 60-70% loss while ignoring better solutions like CoinDCX was ready to buy WazirX and distribute funds to users, but WazirX ignored the offer. The government is silent, and WazirX is using fear tactics. 📢…
Some also accused the exchange of silencing dissent after noticing that comments were disabled on its February 4 announcement post on X, viewing it as an attempt to avoid public scrutiny.
The post WazirX hack victims must vote on recovery plan or face years of uncertainty appeared first on Invezz
