WazirX, the Indian cryptocurrency exchange that experienced a $234 million hack in July, recently announced that customers are unlikely to recover their funds in full during the ongoing restructuring process. George Gwee, a director at restructuring firm Kroll working with WazirX, stated that customers should expect to recover only around 55% to 57% of their funds. This means that at least 43% of the funds held by any customer in WazirX may not be recovered.
The hack, which is the largest cryptocurrency theft in India’s history, has had a significant impact on the country’s crypto industry. Since the incident, WazirX has been diligently searching for ways to return money to its customers. In July, the company proposed socializing the “force majeure” loss, but this solution has yet to be implemented.
Under the ongoing restructuring, WazirX plans to distribute remaining token assets to users in a pro-rata manner via cryptocurrency. The company is also in discussions to share profits from its revenue-generating products, although specific details have not been provided.
During a press conference, WazirX representatives avoided questions regarding their efforts to shore up capital. The company did mention that it is holding talks with an unnamed white knight, but clarified that the capital raised would not be against equity due to an ongoing dispute with Binance, the world’s largest cryptocurrency exchange. Binance and WazirX were previously closely linked, with Binance announcing the acquisition of WazirX in 2019 before later disputing the acquisition. The dispute led to Binance terminating its tech offerings to WazirX in 2022.
Despite the ongoing restructuring, the Indian firm declined to comment on Binance’s ownership of WazirX. Additionally, when questioned about the possibility of selling WazirX as part of the restructuring, the company representatives stated that such a sale was not possible. There is also uncertainty regarding whether the firm will pursue legal actions against Binance and Liminal, the multisignature wallet provider allegedly compromised during the hack.
The pressure on WazirX continues to mount, as CoinSwitch, another major Indian crypto exchange, recently initiated legal action against WazirX to recover approximately $9.7 million worth of assets stuck on the platform. It is worth noting that WazirX counts Indian law enforcement agencies among its customers, further complicating the situation.
Overall, the ongoing restructuring process at WazirX raises concerns for customers who may not be able to recover their funds in full. The company’s discussions with an unnamed white knight and its plans to distribute remaining token assets and share profits from revenue-generating products show some efforts to address the issue. However, the lack of clarity regarding Binance’s ownership, the possibility of legal actions, and the pressure from legal action by CoinSwitch add further uncertainty to the situation. Customers of WazirX will need to closely monitor the developments of the ongoing restructuring process to determine the likelihood of recovering their funds.