By Our Correspondent
In a significant advancement for the Indian cryptocurrency exchange WazirX, the Singapore High Court has formally approved the platform’s restructuring strategy, paving the way for the reimbursement of user funds lost in a major cyberattack.
The incident, which took place in July 2024, led to a loss of $235 million and has been attributed to the infamous Lazarus Group from North Korea, a hacking organization supported by the state.
On January 23, 2025, the Singapore High Court granted its official endorsement under the Companies Act of 1967, enabling WazirX’s parent company, Zettai, to proceed with its proposed plan.
This initiative aims to facilitate creditor recovery and prevent the complete liquidation of the exchange.
The sanctioned plan delineates a court-supervised procedure that, according to WazirX, may result in the recovery of 75% to 80% of the misappropriated funds through the distribution of tokens.
During the court hearings, it was established that WazirX had no involvement in any illegal activities or misconduct related to the cyberattack.
This finding aligns with a joint statement from the United States, Japan, and South Korea, which had previously associated the attack with the Lazarus Group, underscoring the attack’s origin and magnitude.
The restructuring plan incorporates a user voting mechanism anticipated to last up to three months.
Upon completion, the majority vote will dictate whether the recovery plan is implemented.
If users consent, WazirX will initiate the distribution of liquid assets to affected clients within 10 business days, which will also encompass any potential profits from the cryptocurrency market’s recovery since the incident.
The court underscored the necessity of a prompt resolution to facilitate the rapid return of funds to users, advocating for restructuring as a more favorable option compared to liquidation.
Supporting this decision, financial forecasts from Kroll indicated that restructuring might yield greater advantages than completely shutting down the exchange.
In alignment with the court’s ruling, WazirX has initiated measures to freeze a segment of the misappropriated funds, specifically $3 million in USDT (Tether), effective January 17, 2025.
The exchange is also collaborating with international authorities from the United States, Japan, and South Korea to recover additional assets associated with the cyberattack.
The restructuring is being carried out under the Singapore Scheme of Arrangement, which permits companies to propose formal agreements with their creditors.
WazirX’s approach to compensating users includes the issuance of recovery tokens.
These tokens, which represent outstanding claims, will provide creditors with a share in future profits and the recovery of misappropriated assets.
Initial distributions are expected to commence shortly after the approval of the restructuring plan.
The recovery tokens will be periodically repurchased using profits generated from WazirX’s platform and its anticipated decentralized exchange, which is projected to create additional revenue.
Zettai has also pledged to implement a buyback program for these tokens, scheduled to occur over the next three years, utilizing profits and proceeds from the recovery of illiquid assets.
WazirX’s restructuring initiative represents a significant advancement in recovering from one of the most substantial cyberattacks ever experienced by a cryptocurrency exchange.
The legal endorsement from the Singapore High Court provides a structured framework for user compensation while striving to uphold the operational integrity of the crypto exchange.
Through the introduction of a recovery token system and a buyback initiative, WazirX seeks to ensure that affected users are not only reimbursed but also have the potential to benefit from the exchange’s future prosperity.
