In July 2024, Indian cryptocurrency exchange WazirX faced a significant setback when a cyberattack, allegedly orchestrated by North Korea’s notorious Lazarus Group, resulted in a staggering loss of $235 million. The incident had a severe impact on the platform, shaking user confidence. However, WazirX is now diligently working on a comprehensive recovery plan aimed at rebuilding trust and compensating its affected users.
Recovery Plan Supported by Singapore’s Legal Framework
In an effort to address the damages and navigate the road to recovery, WazirX has devised a strategic restructuring plan under the guidance of Singapore’s legal system. In August 2024, its parent company, Zettai, took a significant step by filing a moratorium in the Singapore High Court. This move was aimed at proposing a Scheme of Arrangement, a legal framework that allows the exchange to systematically restructure its debts and liabilities. This approach not only helps WazirX avoid liquidation but also ensures that users will be compensated in an organized and transparent manner.
Moreover, WazirX has reassured its users by revealing that it holds liquid assets amounting to $566.4 million USDT. This amount surpasses the claims of $546.5 million USDT filed by users who were affected by the cyberattack. As a key component of the recovery plan, WazirX intends to distribute recovery tokens to settle these claims, thereby reinforcing its commitment to restoring user trust and confidence.
Efforts to Restore User Trust
Nischal Shetty, the founder of WazirX, has emphasized the critical importance of restoring user confidence, considering it a vital step in the recovery process. He stated, “Our goal is to give users more value than what was stolen.” The distribution of recovery tokens is expected to commence promptly once the court and creditors give their approval to the plan.
However, it is estimated that users will receive approximately 75% to 80% of the value of their account balances at the time of the cyberattack. The initial distributions are slated to occur within 10 business days after the plan is finalized, signaling a swift response to the situation.
Competitor CoinSwitch Extends Support
In a show of solidarity, WazirX’s competitor, CoinSwitch, has stepped in to extend support to the victims of the attack. Coinpedia news recently reported that CoinSwitch has launched a relief fund named “CoinSwitch Cares” with a substantial amount of around $69.9 million (600 crore INR). This fund is specifically aimed at providing relief to affected users, demonstrating the broader crypto community’s commitment to supporting those impacted by such incidents.
Additionally, CoinSwitch is taking legal action against WazirX to recover $1.44 million that is currently stuck on the platform. This move highlights the complexities and challenges faced by the industry in the wake of cyberattacks.
Through these concerted efforts, WazirX aims to not only recover from this setback but also regain the trust of its users. As the broader crypto community rallies behind those affected, WazirX is determined to emerge stronger and more resilient than ever before.
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