Crypto exchange WazirX users are potentially one step closer to recovering funds more than a year after a $234 million hack of the exchange, with 95% of voting creditors greenlighting a new restructuring plan after the first one was rejected by the Singapore High Court earlier this year.
WazirX lost $234 million of crypto from a Safe Multisig wallet mid-July 2024 in an attack since attributed to North Korean hackers, forcing a temporary pause of all crypto and Indian rupee withdrawals on the platform.
On Monday, WazirX founder Nischal Shetty said that if the Singapore High Court approves the latest restructuring proposal, the exchange would restart and begin compensating users within 10 days of “the scheme taking effect.”
The comment contrasts with a town hall on July 30, when George Gwee, a director at restructuring firm Kroll that is working with WazirX, estimated users would have to wait between two and three months after High Court approval before they might receive any funds back.
New vote forced after previous plan was shot down
Almost 150,000 creditors cast a vote between July 30 and Aug. 6, representing over $206 million of the lost funds, according to WazirX.
Users approved a similar scheme in April; however, it fell by the wayside after the Singapore High Court didn’t approve it because of concerns about how the recovery tokens used to compensate users would be affected by the proposed regulatory framework for digital token service providers.
WazirX has said the recovery tokens represent the remaining claims not covered by the initial distribution and track a user’s outstanding balance. Holders are expected to periodically receive additional distributions through holding the tokens funded by WazirX profits and recovered assets.
Singapore’s central bank had set a deadline of June 30 for local crypto service providers to stop offering digital token services to overseas markets.
New company will handle compensation
A significant change between the old proposal and the one just approved by creditors involved which company would compensate users.
Under the amended scheme, WazirX said the recovery tokens will still be repurchased using net profits from the exchange, but the distribution will be managed through Zanmai India, a reporting entity under the jurisdiction of India’s Financial Intelligence Unit.
WazirX parent company Zettai was based in Singapore, but after the High Court ruling, it took steps in June to incorporate a subsidiary, Zensui Corporation, in the Republic of Panama and transfer the operations of the platform’s cryptocurrency-related services.
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Some users frustrated at delays
WazirX has repeatedly warned that repayments could be delayed for years, even up until 2030, if creditors didn’t approve its proposed restructuring plan because the alternative — liquidating the exchange’s assets — would take far longer.
Users on X and Reddit who indicated they planned to vote yes prior to the vote said they wanted the whole saga to be over, and the restructuring plan meant they could at least hope to get some of their funds back.
Meanwhile, those more skeptical had concerns over the delays, the regulatory issues raised by the High Court and the transfer of company operations.
Some also argued that individual holders of unhacked coins would lose out because the tokens had risen significantly in value since the security breach.
Others are pushing for some form of legal action against WazirX. Although a separate April 16 court judgment from the Supreme Court of India dismissed a petition filed by 54 victims of the hack because it couldn’t rule on a matter of crypto policy, which the court said it doesn’t have the authority to rule on.
WazirX didn’t immediately respond to a request for comment.
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