WazirX Secures Court Approval for $235M Hack Recovery Plan

Highlights:

• WazirX secures Singapore Court approval to repay customers affected by the $235M hack.
• Creditors may recover up to 80% of their balances through token distributions.
• Zettai plans a three-year buyback program and a new decentralized exchange to boost returns.

The Singapore High Court has given the green light to WazirX in its plan to compensate the users who were affected by the $235 million hack. According to the report, the Indian cryptocurrency exchange will distribute the funds through a court-supervised process. The plan is to get the user balances back and avoid liquidations.

The cyberattack, which took place in July 2024, has been linked to North Korea’s Lazarus Group. Officials from the United States, Japan, and South Korea collectively agreed on the group’s engagement. The court did not establish any wrongdoing on WazirX’s part in the incident.

Zettai, the parent company of the exchange, applied for reconstruction under the Companies Act of 1967. According to WazirX, users could get back about 75% and 80% of their money. The company will issue tokens, which will represent claims against lost assets.

𝐇𝐮𝐠𝐞 𝐍𝐞𝐰𝐬 𝐟𝐨𝐫 𝐖𝐚𝐳𝐢𝐫𝐗 𝐔𝐬𝐞𝐫𝐬

WazirX’s restructuring plan to repay its users has been approved by the Singapore High Court.

I hope that #WazirX users will now get their money soon 🤞🤞

— Wise Advice (@wiseadvicesumit) January 23, 2025

Court-Supervised Restructuring

The Singapore court has ruled in favor of restructuring over liquidation. This decision was based on financial reports from Kroll. The exchange will use both the recovered funds and recovery tokens to compensate the victims.

The success of the plan will depend on a user vote. The voting process scheduled to be completed in the next three months will then be followed by an independent audit. If approved, distributions will commence within ten business days. The users will be provided with net liquid assets depending on their account balances and any market appreciation.

WazirX has already frozen $3 million USDT associated with the hack. Moreover, authorities from the U.S., Japan, and South Korea are helping to recover more assets.

Recovery Token Strategy

The restructuring plan is based on a Singapore Scheme of Arrangement. This legal framework enables the exchange to issue recovery tokens as compensation. These tokens are used as proof of claim for stolen assets as well as future earnings of the platform.

The first payments will be made within ten days of the activation of the plan. The rest of the claims will be linked to recovery tokens that will be used to repurchase the tokens at specific intervals. Consequently, profits from WazirX’s planned decentralized exchange will fund these buybacks. 

Zettai has agreed to a three-year buyback for recovery tokens. Trading fees and stolen assets recovered will finance the initiative. The exchange intends to address the user’s balances through a financial recovery plan.

Path to Compensation

The plan submitted by WazirX to the court provides a clear repayment schedule. The voting process will shape the next steps. If the users agree to the proposal then the distributions will start within days of activation.

Furthermore, the regulators noted that fast repayment will help the users impacted. The restructuring offers an avenue toward financial recovery without compromising the stability of the platform. Investigations are still underway to seize more stolen assets. The exchange is still working with international authorities to address security issues. WazirX is working on better measures to avoid such occurrences in the future.