WazirX, the defunct Indian cryptocurrency exchange, has ended its rebalancing process and suggests a new plan for those affected by previous hacks.
According to a blog post, victims will receive 85% of their portfolio value if the majority approves the plan. This solution aims to help creditors, who have until February 19, to decide whether to accept the current rebalancing plan.
Strategies for its Recovery Plan
As announced, the first round of payments is set for April, giving hope to those affected by the hack. Creditors can quickly check their share through the WazirX app or website. This step is essential for the platform as it works to address the financial effects of the hack and helps users recover.
Meanwhile, as part of the recovery plan, WazirX has outlined strategies to help restore value to creditors. These include launching a Decentralized Exchange (DEX) and creating recovery tokens. WazirX will also use profits and new revenue to buy back these tokens over the next three years periodically. The recovery tokens will also be tradable, enabling users to recover some of their losses.
However, the entire plan depends on the approval of most creditors. If they don’t, the restructuring plan will fail, and the company will have to go into liquidation under section 301 of the Singapore Companies Act. In that case, WazirX might have to stop operating, and creditors will have few options for returning their money.
WazirX Secures Court Approval for Recovery Plan
In January, the Singapore High Court approved the exchange’s restructuring plan, enabling the repayment of customer funds stolen in the July 2024 breach.
The attack, attributed to North Korea’s notorious Lazarus Group, left users and the platform grappling with significant losses. The restructuring plan, filed by WazirX’s parent company, Zettai, under Singapore’s Companies Act 1967, aims to prioritize creditor recovery while avoiding liquidation.
Furthermore, the exchange estimates that affected users could recover between 75% and 80% of their account balances through token-based distributions.
Notably, the court found no evidence of misconduct or negligence on WazirX’s part in the cyberattack. The conclusion aligned with a joint statement from the United States government, Japan, and South Korea, which linked the breach to the Lazarus Group
WazirX Faces Regulatory Scrutiny and Legal Battles
It is worth noting that WazirX’s efforts come as it faces heightened scrutiny from regulators. India’s Financial Intelligence Unit is reportedly investigating its operations.
Additionally, a coalition of victims has filed a class-action lawsuit, and cases are ongoing in the Delhi High Court, intensifying the pressure on the platform.
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