Overview
WazirX, a prominent Indian cryptocurrency exchange, has unveiled a comprehensive recovery plan following a $235 million hack in July 2024. The exchange aims to compensate affected users through a structured asset distribution strategy supervised by Singapore’s legal framework.
Key Highlights
- Liquid Assets: WazirX holds $566.4 million USDT**, exceeding user claims of **$546.5 million USDT.
- Token Distributions: Initial payouts covering 75%–80% of account balances expected within 10 business days post-court approval.
- Recovery Tokens: Creditors will benefit from future platform profits and asset recoveries.
- Decentralized Exchange (DEX): Proposed DEX launch to generate additional revenue for settling claims.
Recovery Plan Breakdown
1. Financial Restructuring
Under Singapore’s Scheme of Arrangement, WazirX’s parent company, Zettai, filed for a moratorium to restructure debts and avoid liquidation. This legal framework enables binding agreements with creditors, ensuring a streamlined resolution process.
2. Asset Distribution Strategy
- Initial Payouts: Prioritized distributions via USDT tokens for swift user reimbursement.
- Recovery Tokens: Long-term settlements using profits from platform operations and DEX initiatives.
- Periodic Buybacks: WazirX will repurchase recovery tokens to further reduce outstanding liabilities.
Nichal Shetty, WazirX Founder, emphasized:
"Our goal is to restore trust by delivering value beyond the stolen assets. Distributions will commence immediately after court approval."
Market Impact & Competitor Response
Bull Market Advantage
The 2024 crypto bull run contributed to WazirX’s asset surplus, mitigating an initial 45% shortfall against liabilities.
CoinSwitch’s Strategic Move
Competitor CoinSwitch launched a $69.9 million recovery fund** ("CoinSwitch Cares") to attract WazirX users, alongside legal actions to reclaim **$1.44 million stuck on WazirX.
FAQs
1. How much will users recover initially?
WazirX plans to distribute 75%–80% of account balances via tokens within 10 days of court approval.
2. What are recovery tokens?
These tokens represent future claims, redeemable through WazirX’s profits and DEX revenues.
3. Is WazirX avoiding liquidation?
Yes, the Singapore Scheme of Arrangement safeguards the exchange from liquidation by restructuring debts.
4. How does CoinSwitch’s fund work?
The fund offers financial support to hacked users, alongside legal efforts to recover trapped assets.
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Disclaimer: This content is for informational purposes only. Verify details independently and consult financial experts before making decisions.
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