In a major development for Indian cryptocurrency exchange WazirX, the Singapore High Court has officially endorsed the platform’s restructuring plan, offering a path toward repaying user funds lost in a substantial cyberattack.
This hack, which occurred in July 2024, resulted in a $235 million loss and is linked to North Korea’s notorious Lazarus Group, a state-sponsored hacking collective.
On January 23, 2025, the Singapore High Court reportedly gave its official approval under the Companies Act of 1967, allowing WazirX’s parent company, Zettai, to move forward with its plan.
The initiative is designed to aid creditor recovery and avoid a full liquidation of the exchange.
The approved plan outlines a court-supervised process that, according to WazirX, could lead to the recovery of 75% to 80% of the stolen funds through token distributions.
During the court proceedings, it was confirmed that WazirX was not involved in any wrongdoing or misconduct regarding the hack.
This was consistent with a joint statement from the U.S., Japan, and South Korea, which had earlier linked the attack to the Lazarus Group, further emphasizing the attack’s origin and scale.
The restructuring plan includes a user voting process expected to last up to three months.
Once complete, the majority vote will determine whether the recovery plan is executed.
If users approve, WazirX will begin distributing liquid assets to affected customers within 10 business days.
This distribution will include any potential gains from the cryptocurrency market’s upturn since the attack.
The court emphasized the importance of a swift resolution to ensure that funds are quickly returned to users, and it advocated for restructuring as a preferable alternative to liquidation.
Supporting the decision, financial projections from Kroll highlighted that restructuring could be more beneficial than winding down the exchange entirely.
In addition to the court’s ruling, WazirX has taken steps to freeze a portion of the stolen funds, specifically $3 million in USDT (Tether), as of January 17, 2025.
The exchange is also cooperating with international authorities from the U.S., Japan, and South Korea to recover further assets tied to the cyberattack.
The restructuring process is being conducted under the Singapore Scheme of Arrangement, which allows companies to propose formal agreements with creditors.
WazirX’s strategy to compensate users includes the issuance of recovery tokens.
These tokens, representing outstanding claims, will grant creditors a stake in future profits and the recovery of stolen assets.
Initial payouts will begin soon after the restructuring plan is ratified.
The recovery tokens will be periodically repurchased using profits from WazirX’s platform and its planned decentralized exchange, which is expected to generate additional revenue.
Zettai has also committed to a buyback program for these tokens, slated to run over the next three years, using profits and the proceeds from recovering illiquid assets.
WazirX’s restructuring plan marks a key step in recovering from one of the largest cyberattacks ever faced by a cryptocurrency exchange.
The legal backing from the Singapore High Court offers a structured pathway for user compensation while also attempting to maintain the crypto exchange’s operational integrity.
By introducing a recovery token system and a buyback program, WazirX aims to ensure that affected users are not only reimbursed but can potentially benefit from the exchange’s future success.
This approach highlights a broader trend in the crypto and web3 industry towards recovery and accountability, providing a model for other digital currency exchanges facing similar challenges.