Indian cryptocurrency exchange WazirX has received approval from the Singapore High Court to proceed with a restructuring plan. This plan aims to repay users whose funds were stolen in a $235 million cyberattack in July 2024. The hack, linked to North Korea’s Lazarus Group, caused significant losses and impacted thousands of customers.
WazirX gets Singapore court approval to repay victims of $235M hack. Source: X
What the Court Approval Means for Users
On Jan. 23, the Singapore High Court approved WazirX’s restructuring plan under the Companies Act 1967. This plan, filed by WazirX’s parent company Zettai, aims to repay creditors while preventing the exchange from going into liquidation. The court emphasized the importance of a speedy resolution, noting that a structured recovery would provide a better outcome for users compared to liquidation, which would likely result in limited payouts.
WazirX estimates that users could recover between 75% and 80% of their account balances. The recovery plan includes an initial distribution of liquid assets and the issuance of recovery tokens to address remaining claims. These tokens will allow users to benefit from the exchange’s future profits and any additional funds recovered from the hack.
How the Plan Works
The restructuring process involves a detailed plan to repay affected users. The exchange will conduct a user voting process, expected to conclude within three months, to seek approval for the plan. An independent third-party auditor will oversee the process to ensure transparency and fairness.
If the majority of users vote in favor, WazirX will begin distributing liquid assets within 10 business days. This distribution will cover a portion of the stolen funds. Recovery tokens will be issued for the remaining claims. These tokens represent a commitment from WazirX to repurchase them using future profits and recovered assets.
No Evidence of Misconduct
During the court proceedings, WazirX was cleared of any wrongdoing in the cyberattack. The hack was attributed to the Lazarus Group, a North Korean state-sponsored hacking organization. This group has a history of targeting cryptocurrency platforms to fund North Korea’s weapons of mass destruction and missile programs.
The attack on WazirX was one of the largest in 2024, ranking third after hacks on DMM Bitcoin and PlayDapp. The Singapore High Court acknowledged the challenges faced by WazirX and supported its efforts to rebuild through restructuring.
Progress in Recovering Stolen Assets
WazirX has made progress in recovering some of the stolen funds. On January 17, the exchange froze $3 million in USDT linked to the hack. This marked a significant step in the ongoing recovery efforts. WazirX has also been working closely with authorities in the United States, Japan, and South Korea to trace and recover additional assets stolen during the attack.
The approval of the restructuring plan allows WazirX to focus on repaying users and stabilizing its operations. The plan also includes launching a decentralized exchange, which will help generate revenue to support the recovery process.
WazirX Has A Long-Term Plan For Repayment
WazirX’s restructuring plan is being carried out under Singapore’s Scheme of Arrangement, a legal framework that allows companies to propose agreements with creditors. As part of the plan, Zettai has committed to a three-year buyback program for recovery tokens. This program will use profits from the platform and recovered assets to gradually repay users’ remaining claims.
Above all, the exchange’s recovery efforts also include legal proceedings to trace and retrieve stolen funds. In addition to the initial payouts, WazirX will periodically repurchase recovery tokens, ensuring that users receive compensation over time.
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