In July 2024, Indian cryptocurrency exchange WazirX faced a significant challenge when a cyberattack, allegedly orchestrated by North Korea’s notorious Lazarus Group, led to a staggering $235 million loss. Despite the severe impact, WazirX is now channeling its efforts towards rebuilding trust and compensating the affected users.
Strategic Recovery Plan with Singapore’s Support
To effectively address the aftermath of the cyberattack and ensure a path forward, WazirX is implementing a comprehensive restructuring strategy under Singapore’s legal framework. In August 2024, Zettai, the parent company of WazirX, initiated a moratorium petition in the Singapore High Court, advocating for a Scheme of Arrangement. This strategic move enables the exchange to reorganize its debts and liabilities, thereby avoiding liquidation, and ensuring that users are compensated in a structured and transparent manner.
WazirX has reassured its user base by confirming that it holds liquid assets amounting to $566.4 million USDT, surpassing the $546.5 million USDT claims filed by the users affected by the attack. As a pivotal aspect of the recovery initiative, WazirX has announced plans to distribute recovery tokens to meet these claims, underscoring its commitment to user compensation.
Rebuilding and Restoring User Trust
Nischal Shetty, the founder of WazirX, emphasized the critical importance of restoring user confidence, identifying the restructuring as a vital step in this direction. “Our ultimate goal is to provide users with greater value than what was lost,” Shetty remarked. The distribution of recovery tokens is expected to commence shortly after receiving approval from the court and creditors. The company has projected that users will recover approximately 75% to 80% of the value of their account balances at the time of the cyberattack, with initial distributions slated to occur within 10 business days post-approval.
Competitor CoinSwitch Offers Support
In a recent development, as reported by Coinpedia, WazirX’s competitor, CoinSwitch, has introduced an initiative called “CoinSwitch Cares” to assist the victims of the cyberattack. This fund, valued at around $69.9 million (600 crore INR), aims to provide relief to the affected users. CoinSwitch is also pursuing legal action against WazirX to reclaim $1.44 million currently stuck on the platform.
Through these concerted efforts, WazirX is determined to overcome the setback and regain the trust of its users, while the broader cryptocurrency community rallies to support those impacted by the attack. With strategic initiatives and community support, WazirX aims to emerge stronger and more resilient in the rapidly evolving landscape of digital finance.
