WazirX, one of the prominent cryptocurrency exchanges in India, is currently navigating a challenging landscape following a devastating hack that resulted in a substantial loss of customer funds. As legal proceedings unfold, the outlook for affected customers appears less than favorable. According to insights from legal advisers, the chances of making customers whole in cryptocurrency terms seem exceedingly slim, while the prospect of recovery in U.S. dollar equivalents presents a more hopeful scenario, contingent upon market conditions.
Legal Insights into WazirX’s Recovery Efforts
During a recent conference call that included WazirX co-founder Nischal Shetty, legal advisers shared troubling projections for customers seeking refunds in crypto. Below are the key points discussed:
- Customer Fund Recovery: It’s reported that approximately 43% of the customer funds on WazirX are likely unrecoverable.
- Best Case Scenario: The most optimistic outlook suggests that customers might recover 55% to 57% of their total investments.
Hack Aftermath and Legal Proceedings
The cryptocurrency exchange seeks to restructure its liabilities after the disheartening news of losing $234 million due to a cyber breach in July. Tomorrow, the Singapore High Court is expected to review WazirX’s request for a six-month protective order, seeking time to stabilize its financial responsibilities.
- The request is put forth by Zettai Pte, a Singapore registered entity, which oversees operations through its subsidiary Zanmai India.
- The hacked funds constituted 45% of the total customer holdings, prompting the exchange to indicate that it will only be able to facilitate access to the remaining 55% of funds.
This situation paints a grim picture for WazirX customers, who are left grappling with the consequences of the exchange’s vulnerabilities. The legal route they are on, while necessary, may not offer the full restitution they hope for in the volatile world of cryptocurrencies.
“Given the current situation, the reality is that WazirX customers will face significant challenges in recovering their crypto assets in full,” remarked George Gwee, director at restructuring experts Kroll.
For those invested in WazirX and the broader cryptocurrency market, this development serves as a sobering reminder of the risks associated with digital assets and the importance of robust security measures in exchanges.
