‘Is this even real? Absolute joke:’ WazirX’s restructuring plan sparks furious outcry

Hacker Indian crypto exchange WazirX’s latest move has users furious: either support new DEX plan or sit tight for five years to get their money back.

Indian crypto exchange WazirX, which lost hundreds of millions in customer funds in a 2024 hack, is making waves again. This time, over a restructuring plan that’s sparking outrage among users.

In an X post on Tuesday, Feb. 4, WazirX laid out a “breakdown of what happens” depending on whether the community backs its proposal. Urging users to “understand what to expect in both scenarios,” the exchange is essentially offering users two options: support the creation of a new decentralized exchange or brace for a wait of — at least — up to five years to get their money back.

WazirX repeatedly emphasized that should its creditors reject the DEX route, they won’t have a clear timeline for fund recovery, warning that the process could be “potentially extended.” The exchange also noted that any refund would “likely” be in fiat and would take “significantly” longer than the restructuring process.

If creditors opt for restructuring, WazirX plans to build its own DEX. However, based on the X post, it’s still not clear when exactly the platform will launch. Unlike the fiat refund option, the DEX plan at least has one concrete date: April 2025, when WazirX expects a Singapore court to decide whether to approve it, assuming creditors back the proposal.

But while the chart visually frames restructuring as the better option — marked in green, while rejecting it is shown in red — there’s still no clear timeline for when hack victims will actually get their funds back. Instead, WazirX promises to share future DEX profits with creditors, though it hasn’t detailed what percentage, how often, or who exactly will be compensated.

A spokesperson for WazirX told crypto.news that “if the majority of the voters choose to ‘Vote Yes’ for the Scheme, and it becomes effective, the first round of fund distribution of approximately 80-85% will happen in 10 business days.”

“All distributions will happen on a pro rata basis. For the remaining funds, recovery tokens will be issued based on value of the claim of each user. In the next 36 months, the platform’s profits will be used to compensate the users for the rest of the funds.”

WazirX’s spokesperson

The X post with the restructuring chart has disabled comments, though it’s still seems that the crypto community is not buying it. While some shortly called the scheme an “absolute joke,” others urge on the WazirX executive team to sell their sale their property and “whatever” they to get customers funds “back asap.”

Hacked by North Korea

Founded in 2018 by Nischal Shetty, Siddharth Menon, and Sameer Mhatre, WazirX was once one of India’s largest crypto exchanges by trading volume. In December 2021, it reported an annual trading volume of over $43 billion, a 1,735% increase from 2020.

However, in July 2024 WazirX lost over $234 million in multiple crypto assets. The attack was traced back to North Korea’s state-sponsored hacking group, the Lazarus Group, according to a January press release by the U.S. Department of State. The same group was also involved in the CoinEx hack back in September 2023, where it scammed the exchange out of $54 million.

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Following the exploit, WazirX tried to institute a “socialized loss strategy,” which would have seen users access 55% of their funds with the remaining 45% held by the exchange in Tether equivalent tokens. However, the proposal was met with widespread outrage, with users accusing the exchange of trying to avoid taking full responsibility for the losses incurred from the hack. Subsequently, WazirX was forced to backtrack on the plan, asking for more time to work on a resolution.

Shortly after the hack WazirX, which has since moved its assets to new multi-signature wallets, initially pointed to discrepancies between Liminal Custody’s interface — its custodian partner before the hack — and transaction data. An audit by Grant Thornton later found no evidence of compromise in Liminal’s infrastructure, though the custodian didn’t shared the audit findings.

“[…] rather than sharing a detailed post mortem, WazirX instead chose to eschew responsibility by publicly attributing blame to Liminal through a social media post mere hours after the breach – a post they later retracted.”

Liminal Custody

WazirX was likely hacked through a compromised multi-signature wallet system, similar to the Radiant Capital incident, Liminal Custody said in an October 2024 blog post. The attack appears to have involved malware that infected devices used for signing transactions, allowing attackers to manipulate transaction data at the signing stage.

The hack also involved signature mismatches and transaction rejection errors, suggesting that attackers tampered with signed transactions before they were broadcast to the blockchain, the crypto custodian implied.

Read more: WazirX to pay 80% of the stolen customer funds, rules Singapore High Court: community backlash