WazirX users unlikely to get full refund after $234M hack
WazirX, an Indian cryptocurrency exchange that fell victim to a $234 million hack in July, has revealed that its customers may not fully recover their funds. The information was disclosed by George Gwee, a director at Kroll, the firm assisting WazirX with its restructuring process. Gwee told TechCrunch that "at least 43% of the money any customer had in WazirX is unlikely to be recovered."
Court protection sought amid restructuring efforts
In an effort to manage its financial obligations, WazirX has sought six months of protection from the Singapore High Court. Gwee further explained that the best-case scenario would see customers recovering "anywhere between 55% and 57% of their funds." The company's primary objective during this restructuring phase is to distribute remaining token assets to users on a pro-rata basis via cryptocurrency.
Potential profit-sharing plan and capital concerns
WazirX is currently in discussions about a potential profit-sharing plan from its revenue-generating products, although no specific details have been provided. The company has also been in talks with an unidentified investor to raise capital. However, this will not be done through equity due to an ongoing disagreement with Binance, the world's largest cryptocurrency exchange.
Relationship with Binance and potential sale
Binance had announced the acquisition of WazirX in 2019, but later disputed this claim. Following a public disagreement, Binance discontinued its tech services to the Indian firm in 2022. When asked about Binance's ownership of WazirX or the possibility of selling it as part of the restructuring process, company representatives said that such a sale was not feasible.
Legal actions and pressure from CoinSwitch
The possibility of legal actions against Binance and Liminal, the multisignature wallet provider whose system was reportedly compromised during the hack, remains uncertain. Adding to WazirX's challenges is a lawsuit filed by CoinSwitch, another major Indian crypto exchange. CoinSwitch is seeking to recover approximately $9.7 million worth of assets that are currently frozen on WazirX's platform.
