WazirX, an Indian cryptocurrency exchange has completed its asset rebalancing process, marking a major milestone in its recovery plan following last year's cyberattack by North Korean hackers.
The exchange has structured a Scheme of Arrangement that aims to return 85% of creditors' balances in tokens by April 2025—provided the majority of users vote "yes" on the proposal.
Nischal Shetty, founder of WazirX, noted the significance of this step.
"We are grateful to have reached this critical milestone. Completing the rebalancing process and preparing for distribution demonstrates Zettai's deep commitment to protecting creditor interests and restoring the trust placed in the platform," Shetty said.
Understanding the WazirX recovery plan
The Scheme of Arrangement is a legal framework designed to restructure WazirX's financial obligations while providing a clear recovery process for users.
Instead of receiving cash, users will be compensated in tokens, allowing them to benefit from potential price appreciation in the future.
"Leveraging our expertise and strong relationships with law enforcement agencies, exchanges, and projects, zeroShadow is proud to have played a key role in aiding WazirX to freeze the stolen assets and take a significant step toward recovery for affected users," said Jarno Laatikainen, COO of zeroShadow, the blockchain forensics firm assisting with the recovery.
WazirX has partnered with blockchain forensics firm zeroShadow, which has helped freeze $3 million USDT in stolen funds.
What happens if the scheme passes?
If users vote "yes", WazirX will distribute 85% of creditor balances in tokens by April 2025, ensuring users recover most of their lost funds quickly, per WazirX.
The exchange will also continue to recover stolen funds and share profits from future business operations over the next three years. The purchase of recovery tokens issued to affected users will create multiple opportunities for financial recovery.
Most importantly, once the scheme is approved, WazirX will fully resume operations, allowing users to withdraw and trade their assets as usual.
What happens if the scheme fails?
If the scheme is not approved, users could face indefinite delays in accessing their funds, as recovery efforts will be stalled until WazirX's ownership dispute with Binance is resolved.
Additionally, distributions may be made in INR (Indian Rupees) instead of cryptocurrency, eliminating the chance for users to benefit from future price appreciation.
A failed scheme could also result in a longer and costlier liquidation process, similar to Mt. Gox and FTX, where users have waited years without receiving their funds.
At the time of writing, Bitcoin was hovering near $96,000 levels.
