WazirX cryptocurrency exchange creditors will soon vote to decide whether they want to recover stolen funds by April 2025 or wait for recovery until 2030.
Paths for WazirX Creditors to Recover Crypto Assets
WazirX has proposed two scenarios for its creditors. If three-quarters of creditors support the restructuring plan, the scheme will be enacted in two months and will be operational by April 2025. The plan involves launching a decentralized exchange, issuing recovery tokens that can be traded, and conducting periodic buyback of these tokens using profits from various platforms while exploring new revenue streams. Conversely, If creditors reject the scheme, a liquidation process will be initiated, which will be less favorable for creditors.
The Story Behind WazirX Cyberattack
WazirX's troubles began in July 2024 after a successful attack by North Korean hackers Lazarus, who stole over $230 million of users' funds. The stolen assets were later laundered through various addresses using Tornado Cash, leaving the exchange no hope of fully recovering the stolen money. The failure to recover funds and the attempt to impose a 70% penalty on undisclosed crypto gains following the attack has drawn criticism from users.
Singapore Court's Approval for WazirX Restructuring
Last month, the Singapore High Court approved WazirX's restructuring plan to avoid liquidation. It is estimated that users may recover up to 80% of their balances. The plan involves issuing recovery tokens representing claims and allowing creditors to benefit from recovered assets and future platforms profits. However, the decision has angered some Indian users who accuse co-founder Nischal Shetty of controlling the process.
The decision regarding the recovery of WazirX creditors' funds hangs in balance, and the outcome of the upcoming vote will determine the next steps for the exchange. With tensions among users and investors running high, the approaching deadline is set to be a pivotal moment.
