Indian cryptocurrency exchange WazirX has announced that customers affected by the recent cyber attack will likely recover only a portion of their funds, as the company embarks on a significant restructuring process. This comes in the wake of one of the largest crypto thefts in India, with assets worth $240 million (approximately ₹2,000 crore) stolen on July 18.
During a virtual press conference, Jason Kardachi, Managing Director of restructuring firm Kroll, stated that the company might return only 55-57% of the stolen funds to users. “This is what can be returned to users with the benefit of this restructuring,” Kardachi explained.
WazirX, which is owned by Singapore-based Zettai, has sought court approval for its restructuring plan, applying for protection under Singapore’s legal system on August 23. The court is expected to consider creditors’ views on whether to grant a moratorium that would shield the company from certain legal actions, allowing it to develop a comprehensive restructuring proposal.
In an effort to stabilize its operations and address customer concerns, WazirX is actively searching for a “white knight”—a strategic investor or partner—to inject capital and collaborate on future ventures. The company is exploring various avenues to generate revenue, including profit-sharing mechanisms and accelerated withdrawal options for users who require liquidity. Additionally, WazirX is focusing on tracing and recovering the stolen crypto assets to bolster the recovery process for its users.
Despite the ongoing crisis, WazirX has allowed customers to withdraw funds in rupees, although crypto assets remain frozen. The exchange, which boasts 4.3 million active users primarily in India, has seen increased pressure from its customer base to return their funds. To address this, the company emphasizes the necessity of the moratorium to provide Zettai, its parent company, time to negotiate with creditors and finalize a restructuring plan.
Nischal Shetty, co-founder of WazirX, highlighted the complexities surrounding the company’s financial position, especially given its ongoing dispute with Binance. “Our position still is that WazirX was sold to Binance and that dispute is still on. If both sides take that position then it would mean a longer delay for the users because they will have to wait for the conclusion of the dispute,” Shetty said during the call. However, neither Shetty nor representatives from Kroll provided further details on the nature or status of the dispute.
The history of the dispute between WazirX and Binance adds another layer of complexity to the situation. Binance, which operated WazirX’s crypto deposits until January last year, announced its intention to cease providing services to the platform. Under protest, Zettai took partial control of the crypto tokens to prevent disruptions for WazirX users, while Binance continued to operate the platform.
As WazirX navigates this turbulent period, the outcome of the court’s decision and the search for strategic partners will be critical in determining the future of the exchange and the extent to which affected users can recover their assets.
