WazirX Restructuring Plan Approved by 95% of Creditors After Hack

WazirX users have once again approved a restructuring plan aimed at returning stolen funds to victims, following its rejection by the Singapore High Court earlier this year. With 95% of voting creditors endorsing the new proposal, the plan marks a potential turning point in the one-year-long aftermath of a $234 million hack attributed to North Korean actors [1]. The funds were lost from a Safe Multisig wallet in mid-July 2024, prompting WazirX to temporarily halt all cryptocurrency and Indian rupee withdrawals on the platform [1].

Founder Nischal Shetty indicated that, if approved by the High Court, the plan could lead to the platform resuming operations and compensating users within 10 days of its official implementation [1]. This timeline contrasts with earlier estimates from George Gwee of Kroll, a restructuring firm working with WazirX, who projected a two to three month wait for users to see any returns [1].

The previous restructuring plan had been rejected by the court due to concerns about how the recovery tokens—intended to compensate users—would be regulated under Singapore’s evolving framework for Digital Token Service Providers [1]. Recovery tokens represent claims on undistributed assets and are expected to provide ongoing returns as WazirX generates profits and recovers more funds [1]. This time, the restructuring proposal includes a shift in the entity responsible for distributing compensation: Zanmai India, a reporting entity under India’s Financial Intelligence Unit, will manage the process [1].

WazirX’s parent company, Zettai, moved part of its operations to Panama in June, following the Singapore High Court’s rejection of the initial restructuring plan [1]. This move reflects the broader legal and regulatory challenges faced by the platform in its efforts to resolve the aftermath of the hack.

Over 150,000 creditors participated in the recent voting process, representing more than $206 million of the lost funds [1]. The high approval rate suggests strong user support for the plan despite lingering frustrations over delays and regulatory uncertainty. Some users expressed concerns about the potential devaluation of their claims, especially as the recovery tokens have appreciated in value since the breach occurred [1]. Others are calling for legal action against WazirX, although a separate petition was dismissed by the Supreme Court of India on jurisdictional grounds [1].

WazirX has consistently warned that delays could extend for years, with the alternative of liquidating the exchange’s assets being a far slower and less favorable option for users [1]. The latest restructuring plan, while not without controversy, offers a renewed hope for resolution. If it is formally approved by the court, it could mark a significant step toward restoring trust and stability for one of India’s largest cryptocurrency platforms [1].

Source: [1] WazirX users approve new restructuring plan after hack (https://cointelegraph.com/news/wazirx-users-approve-new-restructuring-plan-after-hack?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound)