WazirX Creditors Approve Post-Hack Recovery Plan With Overwhelming Majority

More than 90% of WazirX creditors approved the Indian crypto exchange’s restructuring proposal following its $235 million hack in July 2024. The vote was finalized on March 28 and saw 93.1% of participating creditors, representing 94.6% of the value, back the plan.

The approval avoids a scenario in which repayments might have stretched into 2030, a warning WazirX issued earlier this year if the plan failed. Under the new structure, WazirX will repay users through a mix of stablecoin distributions and newly created recovery tokens. The tokens give creditors a stake in future platform revenues and potential asset recoveries.

The proposed scheme will distribute assets in the form of tokens, covering 85% of user balances as of July 18, 2024, at 1 PM IST—the date of the breach. The distribution process is set to begin within 10 business days of the scheme being approved, which WazirX claims would be among the fastest recoveries in the crypto industry.

WazirX CEO Nischal Shetty described the result as a turning point, telling Cointelegraph the team is prioritizing fund recovery and future profit sharing to compensate affected users. “The people have spoken,” Shetty said in an X post. “We will work hard on rebuilding and creating value for everyone.”

WazirX currently holds $566.4 million in liquid assets, slightly more than the $546.5 million in claims. The plan includes the periodic buyback of recovery tokens using profits from operations and a new decentralized exchange (DEX), which Shetty says will offer self-custody and ease of use comparable to centralized platforms.

The hack, attributed to North Korean cyber actors, targeted a Safe multisig wallet, continuing a trend of large-scale exploits related to access controls. To mitigate future risks, WazirX shifted crypto custody to BitGo and Zodia, adding insurance coverage as part of its upgraded security strategy.

Beyond the initial distribution, the scheme outlines additional distributions over a three-year period, funded by the recovery of illiquid assets—including stolen tokens—and profits from future operations. WazirX partnered with blockchain forensics firm zeroShadow to track and recover stolen funds, successfully freezing nearly USDT 3 million so far.

In November, Delhi Police arrested a suspect from Bengal involved in the $235 million hack. WazirX cooperated with the investigation by providing necessary hardware, KYC records, and transaction logs. The Indian Cyber Crime Coordination Centre (IFSO) independently confirmed that WazirX’s security measures remained uncompromised, as the hack stemmed from external deception.

The hacker moved stolen funds using the U.S.-sanctioned crypto mixer Tornado Cash. Onchain analytics platform Arkham reported that more than 61,500 ether ($161 million) has been transferred to the mixer so far.