WazirX Moves Forward with Restructuring Strategy to Recover from Cyberattack

• WazirX’s restructuring plan aims to resolve the $230M loss swiftly, using a Singapore Scheme of Arrangement for fair asset distribution.
• INR withdrawals resume August 26 with a 60% fee reduction; cryptocurrency withdrawals remain paused due to asset shortages.
• WazirX warns against external parties seeking to prolong uncertainty, emphasizing that the restructuring is not bankruptcy or liquidation.

Following a cyberattack on July 18, Indian cryptocurrency exchange WazirX announced a new reorganization approach to reduce the heist’s effect, resulting in a loss of more than $230 million in digital assets. Through its latest communications, the exchange confirmed its commitment to a legal and expedient recovery process.

👋 tribe! We understand that our decision to pursue this restructuring path may raise some concerns, but we want to emphasize that it is the most expedient and legally sound approach to addressing the current crypto-related issue.

We believe this direction is in the best… pic.twitter.com/1NiLMV88E9

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 24, 2024

Recovery Initiatives and Legal Framework

WazirX has initiated several strategic measures to safeguard its stakeholders’ interests and ensure the stability of its operations. The exchange has opted for a Singapore Scheme of Arrangement to manage the distribution of remaining crypto assets. This decision ensures a fair and orderly asset allocation among affected users. According to WazirX, this approach is the quickest and most legally sound method to tackle the current situation, diverging from more prolonged processes like bankruptcy or liquidation.

Furthermore, WazirX is actively investigating numerous legal channels to retrieve the stolen funds, including bounty programs. The corporation has indicated that these efforts are ongoing and demonstrate its commitment to ensuring the best possible outcome for its customers.

Resumption of Financial Services

WazirX plans to resume INR withdrawals in a phased manner starting August 26, while cryptocurrency withdrawals remain on hold due to a shortage of ERC-20 token assets necessary to meet user liabilities. The structured resumption of these services is intended to provide liquidity and reassurance to its customers, affirming the company’s proactive stance in navigating the crisis.

The exchange has also announced a 60% reduction in withdrawal costs as part of its restructuring efforts. This reduction aims to ease the financial load on its users during this transitional period while increasing user trust through lower operational expenditures.

Caution Against External Disruptions

In its communications, WazirX has warned its users and the broader community about potential disruptions from external parties who might exploit the restructuring process for personal gain. The exchange stressed that these parties’ motivations may differ from those of WazirX or its community, prolonging the uncertainty.

Shetty, the co-founder of WazirX, has said that the reorganization is not an indication of insolvency or liquidation, but it is a measure that should be addressed effectively. To address the lack of explanations, Shetty has promised to explain more through different social media platforms including blogging and live videos AMAs, and has assured the public that a detailed process of the restructuring will be out next week.

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