WazirX, once the largest crypto exchange in India, is at a crucial crossroads. Creditors of the platform, which suffered a devastating hack in July 2024, must now decide whether to accept a new restructuring scheme. This decision could significantly impact the recovery of over $230 million in stolen funds.
In the coming weeks, creditors will vote on the proposed plan. If more than 75% by value approve it, they could start receiving their stolen crypto as early as April 2025. This approval would also allow WazirX to restart trading operations and initiate payouts within ten business days after the scheme’s activation.
The restructuring plan includes launching a decentralized exchange (DEX) and issuing recovery tokens. These tokens can be traded, and the platform aims to buy back these tokens periodically using profits and new revenue streams. This approach offers a glimmer of hope for creditors eager to recover their losses.
However, if the creditors do not approve the scheme, the situation could worsen. The process would shift towards liquidation under Singapore’s Companies Act. This would likely result in a fire sale of WazirX’s assets, drastically reducing the amount creditors could recover. Estimates suggest that without the restructuring plan, creditors may have to wait until 2030 for any refunds.
The hack, attributed to the North Korean hacker group Lazarus, left WazirX reeling. The attackers managed to launder the stolen funds using Tornado Cash, making it hard to trace the assets. CoinDesk reported in September that this obscurity has further diminished hopes of a complete recovery.
WazirX has faced intense scrutiny over its response to the crisis. Critics have pointed to poor communication with users and inadequate handling of fund recovery efforts. In January, the exchange filed for a moratorium in Singapore courts. The court approved a restructuring plan aimed at creditor recovery, which has temporarily avoided a total liquidation.
As the voting date approaches, WazirX creditors are left to weigh their options. The decision they make could determine the future of the platform and the potential recovery of their stolen funds. The stakes are high, and the pressure is mounting. Will creditors take a chance on the restructuring scheme, or will they face a long wait filled with uncertainty?
