Indian cryptocurrency exchange WazirX has secured approval from a Singapore court to begin repaying customers impacted by a devastating hack in July 2024. The attack, one of the largest in crypto history, resulted in the loss of $235 million worth of customer funds.
While the court decision offers a glimmer of hope, the road to recovery for the exchange’s 4.2 million affected users remains uncertain.
Hack Details and Immediate Actions
The breach forced WazirX to freeze the remaining funds to prevent further losses and stem potential panic among customers. Its parent company, Zettai, headquartered in Singapore, had to obtain court approval to unfreeze these funds. The court’s ruling paves the way for WazirX to proceed with a repayment plan.
However, the process is far from straightforward. For the funds to be disbursed, more than 50% of the affected customers must vote in favour of the repayment plan. This vote, supervised by an independent entity and audited by the court, is expected to take place within three months.
Court-Backed Restructuring Over Liquidation
The Singapore court supported a restructuring plan rather than liquidation, citing projections by Kroll, a financial advisory firm. This decision aligns with the court’s preference for a quick and efficient distribution of funds.
The restructuring process will follow the Singapore Scheme of Arrangement, which allows companies to propose binding agreements with creditors.
As part of this effort, WazirX aims to introduce “recovery tokens.” These tokens will represent remaining claims and grant users a stake in future profits and recovered assets.
Also Read: WazirX Releases Proof of Reserves Showing $157M Crypto Still in On-Chain Wallets, Details Inside
Recovery Tokens and Initial Payouts
Initial payouts are expected to be completed within 10 business days once the scheme receives approval and is activated.
The recovery tokens will allow creditors to benefit from platform revenue, including profits from a decentralized exchange that WazirX plans to launch.
Efforts to recover stolen assets are also ongoing. The exchange froze $3 million worth of USDt from stolen funds on January 17, 2025.
WazirX is collaborating with authorities in the US, Japan, and South Korea to trace and recover additional assets linked to the hack.
Impact on Customers and Market Developments
The hack caused significant distress among customers, many of whom lost access to their remaining funds. In September 2024, WazirX sought and received a four-month court order shielding it from legal action by aggrieved users.
Interestingly, the ongoing crypto bull market has significantly increased the value of frozen assets. As a result, the exchange may be able to minimize or eliminate losses for customers by the time the repayment process concludes. However, the final value of the funds remains uncertain due to potential market fluctuations.
Also Read: WazirX Reveals Plans For Creditors’ Fund Recovery: When Will Users Get their Money?