WazirX Aims to Rise From the Ashes
The $235-million-hack recovery plan of the Indian crypto exchange will now face a final court hurdle next month before restarting its operations.
WazirX is just weeks away from potentially restarting operations after suffering the country's worst crypto hack last summer.
Founded in 2017 by Nischal Shetty, Sameer Mhatre, and Siddharth Menon, the ownership structure of WazirX became contentious after a disputed 2019 acquisition by Binance, with parent company Zettai PTE Ltd (Singapore) owning 99% of the Indian operating entity Zanmai Labs.
The Singapore High Court will decide on May 13 whether to approve the restructuring proposal of the exchange before it can begin compensating victims of the $234.9 million heist that froze the crypto assets of thousands of users.
How did we get here?
Last July, hackers (later identified as North Korea's Lazarus Group) were executing one of crypto's most damaging attacks.
The breach targeted WazirX's multi-signature wallet system by:
Creating a fake WazirX account and depositing tokens
Purchasing GAL 0.00%↑ A tokens to drain the hot wallet
Manipulating the smart contract that controlled the multisig wallet
Exploiting a discrepancy between the interface and actual transaction contents
The result?
About 45% of customer funds worth $234.9 million vanished overnight, forcing the exchange to immediately suspend all trading and withdrawals.
Read: How India's WazirX Got Hacked 🏴☠️
The Recovery Plan
After months of uncertainty, WazirX's parent company Zettai PTE Ltd presented creditors with an unexpectedly ambitious recovery proposal.
The plan's key components:
Recovery Tokens (RTs) issued to creditors on a pro-rata basis
First distribution within 10 business days of court approval
Expected recovery of ~85.3% of user balances in USD terms
Continued recoveries through profit-sharing over a 36-month period
Platform restart to generate revenue for the recovery fund
On April 7, 93.1% of voting creditors representing 94.6% in value backed the plan — a striking vote of confidence given the industry's history with exchange collapses.
Why Restructure, Not Liquidate?
WazirX painted a contrast between its restructuring plan and the liquidation alternative.
Indian authorities have largely remained on the sidelines.
On April 16, the Supreme Court of India dismissed a petition from 54 hack victims seeking legal action against WazirX, Binance, and custody provider Liminal.
The court stated it couldn't rule on crypto policy matters and advised petitioners to approach relevant regulatory authorities instead.
Can WazirX execute its ambitious recovery plan in a market that's moved on without it? The path ahead has significant challenges.
Rebuilding trust in its security practices
Competing with exchanges that have captured its former market share
Generating sufficient profits to fund the promised recoveries
For an industry accustomed to exchanges disappearing after hacks, WazirX's structured recovery attempt represents a rare alternative path — one that could become a template for future exchange recoveries if successful.