WazirX Warns Repayments From $234M Hack Could Be Delayed Until 2030
Indian cryptocurrency exchange WazirX has warned repayments related to its $234 million hack may be delayed—potentially until 2030—depending on the approval of its restructuring scheme.
In a post on X, WazirX revealed two possible scenarios for repayments: one via restructuring, which could hasten the process, and another via liquidation, which could significantly delay it.
Two roads, two very different results,” WazirX said, as the exchange asked creditors to make informed decisions ahead of the vote.
The $234M Hack and Its Aftermath
The giant hack had happened in July when hackers took advantage of a weakness in WazirX’s multisig wallet system, where three out of six signatures needed to approve any transaction. This loophole gave the hackers the chance to siphon off $234 million worth of crypto.
The breach was a severe blow to India’s already-pressured crypto sector amidst regulatory scrutiny. Indian exchanges have struggled for traction, with volumes dwindling ever since the introduction of a 1% Tax Deducted at Source on all crypto transactions. Many retail investors have moved to foreign platforms to avoid excessive tax burdens.
Despite these challenges, WazirX is working toward possible solutions, with the aim of addressing concerns over repayment in light of continued regulatory uncertainties.
Two Scenarios for WazirX Repayment: Restructuring vs. Liquidation
WazirX presented two contrasting repayment options:
- Restructuring Scheme: If creditors approve the plan, there will be a structured process of repayment, and the amount recovered may be complemented by profit-sharing mechanisms.
- Liquidation: In case of the failure of the restructuring scheme, creditors will have to continue living with uncertainty because of the unresolved ownership issue and litigation.
In case of liquidation, WazirX said, creditors may get much lower payoffs due to liquidation costs and lack of additional recovery mechanisms. The delay could also lead to creditors losing on potential market gains as assets lose value over time.
Hence, at this crucial juncture of critical decisions, WazirX has called upon all its creditors to keep themselves updated and to make informed voting decisions regarding the same.
