TLDR
- Singapore High Court approved WazirX’s restructuring plan to repay 75-80% of stolen customer funds from July 2024 hack
- $234 million was stolen by North Korea’s Lazarus Group, the same group behind the $54 million CoinEx hack
- WazirX issued recovery tokens to affected users, giving them rights to future profits and recovered funds
- Exchange has frozen $3 million in stolen USDT and is working with authorities across multiple countries
- Community group “Justice for WazirX users” criticizes the lengthy voting process and expresses skepticism
The Singapore High Court has approved a restructuring plan that requires cryptocurrency exchange WazirX to repay between 75% and 80% of customer funds stolen in a major hack last year. The ruling, made on January 23, 2025, under the Company’s Act 1967, marks a turning point for victims of the $234 million theft.
The July 18, 2024, attack on WazirX resulted in the loss of multiple cryptocurrency assets. Investigators traced the breach to the Lazarus Group, a state-sponsored hacking organization from North Korea. This group has a history of targeting cryptocurrency platforms, including their previous attack on CoinEx in September 2023, which resulted in a $54 million loss.
The court-approved restructuring plan aims to prevent the exchange’s liquidation while prioritizing the recovery of user funds. Under the plan, WazirX will distribute liquid assets to affected customers within 10 business days after receiving majority approval through a user voting process.
To address immediate concerns, WazirX has introduced recovery tokens as a form of digital credit for affected users. These tokens serve multiple purposes: they document the amount owed to each user, provide holders with a share of the exchange’s future profits, and guarantee a portion of any recovered stolen funds.
The Singapore High Court has granted us leave to convene a Scheme Meeting. This marks another significant milestone in the restructuring process as we move closer to restarting the WazirX platform.
The next step? Prepare for the Voting Process.
Scheme Creditors will have the…
— Nischal (Shardeum) 🔼 (@NischalShetty) January 23, 2025
The exchange has committed to a three-year token repurchase program using its profits. This approach allows WazirX to maintain operations while working toward making users whole. The restructuring process will follow the Singapore Scheme of Arrangement, providing a formal framework for the agreement between the exchange and its creditors.
Some progress has already been made in recovering the stolen assets. WazirX has successfully frozen $3 million worth of Tether (USDT) and is actively collaborating with authorities in the United States, Japan, and South Korea to locate and retrieve additional stolen funds.
The court’s investigation found no evidence of wrongdoing by WazirX regarding the hack. This ruling helps clear the exchange’s name and sets the stage for the implementation of the recovery plan.
The repayment process begins with a user voting period spanning three months. During this time, affected customers will have the opportunity to review and approve the proposed restructuring plan. The exchange has included provisions for distributing any gains in crypto market value that have occurred since the attack.
However, not all community members support the current plan. A group called “Justice for WazirX users” has formed on Discord and X (formerly Twitter) to voice concerns about the implementation timeline. Their main criticism centers on the length of the voting process, which they believe should take less than three months.
Nischal confirmed that we’re not receiving anything in April either.
How can you trust someone who keeps lying so casually?#WazirxScam #WazirX $BTC pic.twitter.com/f8280tDdZb
— Justice for WazirX Users (@IndiasCrypto) January 23, 2025
The group has specifically targeted CEO and founder Nischal Shetty, claiming he is unnecessarily extending the voting period beyond four months. This has created tension between the exchange’s leadership and affected users who seek faster resolution.
The recovery tokens issued by WazirX represent a novel approach to handling cryptocurrency theft aftermath. These tokens not only acknowledge the debt owed to users but also give them a stake in the exchange’s recovery efforts and future success.
WazirX’s collaboration with international authorities demonstrates the global nature of cryptocurrency crime investigation. The involvement of law enforcement agencies from multiple countries highlights the complexity of tracking and recovering stolen digital assets.
The exchange’s ability to freeze $3 million in stolen USDT represents an early success in the recovery efforts. This achievement suggests that additional funds might be recovered as investigations continue across multiple jurisdictions.
The three-year timeline for token repurchase provides a clear endpoint for affected users while giving the exchange sufficient time to generate the necessary profits for repayment. This structured approach aims to balance the immediate needs of victims with the practical constraints of fund recovery.
The Singapore High Court’s ruling sets a precedent for handling large-scale cryptocurrency theft cases. The detailed restructuring plan provides a framework that other exchanges might follow in similar situations.
