Creditors of WazirX, the prominent Indian crypto exchange that suffered a devastating hack, may soon receive some recovery of their lost assets. The timeline for potential payouts could begin as early as April 2025, depending on the outcome of an upcoming voting scheme where affected creditors will determine the fate of a proposed restructuring plan.
According to recent announcements, creditors will be asked to vote on whether to approve the restructuring scheme. To move forward, the proposal requires the support of a supermajority, specifically over 75% by value of those who vote. This plan was previously sanctioned by a Singapore court, providing a glimmer of hope for those impacted by the July 2024 breach, which resulted in the theft of over $230 million in user funds by the North Korean hacking group Lazarus.
Should the creditors approve the scheme, WazirX is poised to restart trading operations, with initial payouts to creditors expected within ten business days following the scheme’s activation. These payouts will include the distribution of net liquid assets, offering a structured path towards recovery for those affected.
This restructuring plan aims to not only facilitate immediate compensation but also includes innovative measures such as launching a decentralized exchange (DEX) and issuing recovery tokens. These tokens would be tradable and feature periodic buyback initiatives funded by platform profits and new revenue avenues.
However, if the creditors do not approve the plan, the consequences could be dire. The restructuring would fail, and the platform would likely enter a liquidation process under section 301 of the Singapore Companies Act. This scenario would potentially lead to a fire sale of WazirX’s assets, with creditors likely to receive far less compensation as the assets are sold off at lower market values, a situation WazirX has cautioned against in recent communications.
WazirX, once a leader in India’s cryptocurrency landscape, has struggled to recover from the repercussions of the hack. The laundering of the stolen funds through various addresses has further complicated recovery efforts, diminishing hopes of regaining the entirety of the lost assets, as reported by CoinDesk.
The exchange, facing significant financial and reputational challenges, has endured criticism regarding its crisis management, particularly in areas related to user communication and the effectiveness of its fund recovery processes. In January, WazirX successfully obtained court approval for its restructuring plan, marking a significant step away from total liquidation and towards a more constructive path for creditor recovery.
As the impending vote approaches, creditors remain hopeful for a positive outcome that could herald a new operational era for WazirX and provide much-needed restitution for those affected by the hack.
