India's largest crypto hack leaves WazirX customers anxious as legal and financial challenges complicate fund recovery efforts.
In July, Indian cryptocurrency exchange WazirX faced a significant setback when it was hacked for $234 million. This incident has left many customers anxious about the recovery of their funds. Here, we break down the current situation and what it means for WazirX customers.
The hack is the largest in India's crypto industry, causing substantial financial loss to WazirX and its customers. Legal advisers have indicated that it is extremely unlikely for customers to be fully compensated in cryptocurrency. Instead, there might be a possibility of recovery in U.S. dollar terms, but this is contingent on market improvements.
WazirX is actively seeking solutions to return funds to its customers. One of the proposed methods includes profit sharing from revenue-generating products. However, customers might only recover between 55% and 57% of their funds, according to legal advisers. The exchange is also in talks with a potential investor, which could provide a financial boost to aid in the recovery process.
To manage its liabilities and explore restructuring options, WazirX has sought six months' protection from the Singapore High Court. A hearing is scheduled to discuss this request. This period of protection is crucial for WazirX to reorganize its financial obligations and seek viable solutions for compensating its customers.
Despite these efforts, WazirX faces several challenges. A notable issue is the ongoing dispute with Binance. In 2019, Binance announced the acquisition of WazirX, but later disputed the acquisition. This conflict adds another layer of complexity to WazirX's recovery and restructuring plans.
