In a significant development for the victims of the WazirX hack, the exchange has announced that users will receive 85% of their portfolio value as recorded on July 18. This decision follows the completion of asset rebalancing on Tuesday, with the first distribution round scheduled for April. This move brings some relief to those affected by the devastating security breach that saw $230 million drained from the platform in July 2024.
Users can now view both the U.S. dollar and Indian rupee values of their lost assets as of Tuesday. To enhance the compensation process, upside from unstolen tokens belonging to individuals has been distributed across all users. This strategy allows for a higher return amount, making it a crucial part of the recovery plan.
Creditors participating in this recovery initiative have until February 19 to accept the rebalancing proposal. For the plan to progress, a majority vote of 75% is required. The outlined refund plan includes launching a decentralized exchange (DEX), issuing recoverable tokens that can be traded, and establishing a periodic buyback of these tokens using profits from the platform as well as new revenue streams over the next three years.
However, there is a significant risk involved. If the scheme fails to gain approval, the restructuring plan may collapse, leading to liquidation under Section 301 of the Singapore Companies Act. In such a scenario, a fire sale of assets could ensue, forcing creditors to accept less compensation as these assets are liquidated at lower market values.
The security breach that triggered this crisis was executed through one of WazirX’s multisig wallets, resulting in the loss of over $100 million in shiba inu (SHIB) and $52 million in ether, among other significant assets. The stolen funds represented more than 45% of the total reserves reported by the exchange in June 2024. Investigations have indicated that the North Korean hacking group Lazarus is suspected of orchestrating this attack, as previously reported by CoinDesk.
This situation underlines the importance of robust security measures in the cryptocurrency industry, and the ongoing saga of the WazirX hack serves as a cautionary tale for both users and exchanges alike. Victims remain hopeful that the upcoming distributions will provide some restitution for their losses, and the future of WazirX hinges on the successful implementation of its recovery plan.
