WazirX Hack Update: Legal Advisors Announce Limited Recovery for Crypto Users

WazirX Hack: Latest Developments and Recovery Efforts

Hacked crypto exchange WazirX will only be able to return around 55-57 percent of the users' crypto funds going by the initial restructuring plan, the exchange's legal advisors said in a town hall on September 2 following the $230-million cyberattack.

WazirX has hired Kroll to assist with its legal procedures related to restructuring plans after it lost nearly 45 percent of its crypto asset holdings in a cyber theft last month.

"55-57% of the funds in crypto terms can be returned to users with the benefit of these restructuring plans," said Jason Kardachi, managing director at Kroll. However, he added that the management is exploring more options to return funds to users.

Continuing Negotiations and Future Plans

The ongoing discussions are aimed at generating additional money for user recovery and include options for recovering stolen crypto. Nischal Shetty, founder and CEO of WazirX, remarked, "We are not in a position to say much today because we are in the negotiation and ideation stages."

To proceed with restructuring and seek a moratorium to prevent legal actions, WazirX's Singapore parent, Zettai, filed an affidavit on August 27. The court hearing is scheduled for September 3.

• WazirX is talking to 11 global crypto exchanges for capital infusion.
• Signed NDAs with at least three exchanges.
• Key focus is to gather feedback from 4.3 million creditors.

Approximately $12 million worth of user assets is set aside to cover investigation expenses, operations, restructuring, and legal costs, while over $28 million in crypto assets remain intact with Indian law enforcement agencies.

Ownership Disputes Complicate Recovery

The biggest hurdle for WazirX and its users is the disputed ownership between Zettai and Binance, complicating negotiations with other crypto exchanges for potential partnerships and bailouts. Shetty explained, "WazirX's ownership situation makes selling impossible; therefore, we are exploring partnerships."

In 2022, the Enforcement Directorate froze WazirX's bank assets, creating further issues regarding equity and operations with Binance's CEO clarifying ownership disputes publicly.