Cryptocurrency exchange WazirX has presented a critical restructuring plan to its creditors, offering two stark options: approve the scheme and start receiving refunds as early as April 2025 or face a protracted wait until 2030 with potentially reduced recoveries.
The proposed plan, which requires approval from at least 75 per cent of creditors by value, was previously sanctioned by a Singapore court. If it garners sufficient support, WazirX aims to resume trading operations in April 2025. Initial payouts are expected within ten business days of the scheme’s activation, with creditors receiving net liquid assets.
Two paths, two very different outcomes.
Here’s a breakdown of what happens if the Scheme is approved versus if it isn’t. Understand what to expect in both scenarios as we approach the voting process. pic.twitter.com/ZcXpC8g79Q
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) February 4, 2025
What’s WazirX’s Recovery Blueprint?
The platform’s recovery blueprint includes launching a decentralized exchange (DEX), issuing tradable recovery tokens, and implementing periodic buybacks of these tokens using profits from the platform’s renewed operations. WazirX hopes this approach will rebuild trust and provide meaningful compensation to its users.
However, rejection of the scheme would trigger a liquidation process under Section 301 of Singapore’s Companies Act. This scenario could result in a “fire sale” of assets, likely yielding lower returns for creditors. The company has warned that asset recovery under this route might be less favourable and significantly delayed, with a projected completion date of 2030.
Major Hack In 2024
The exchange was a major player in India’s cryptocurrency market until it fell victim to a devastating hack in July 2024. The North Korean hacker group Lazarus reportedly stole over $230 million in user funds, which were then laundered through Tornado Cash to obscure transactions. The incident severely damaged WazirX’s reputation and financial stability.
Efforts to recover the stolen funds have faced challenges, and WazirX has come under fire for its crisis management, particularly regarding communication with affected users and the pace of recovery efforts.
In January, the company secured court approval for the current restructuring proposal, seen as a last-ditch effort to avoid complete liquidation. Creditors now face a pivotal decision that will determine their financial outcomes in the coming years.
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