WazirX Rolls Out Lost-Fund Recovery Plan: Decentralised Exchange, Recovery Tokens, More In Pipeline
WazirX CEO Nischal Shetty highlighted the growing demand for self-custody solutions in the wake of numerous security breaches on centralised exchanges.
Cryptocurrency exchange WazirX, in a strategic move to recover user funds lost in a massive cyberattack, is set to launch a decentralised exchange (DEX) along with a revamped version of its platform. This initiative aims to help reimburse users impacted by a Rs 2,000-crore security breach that occurred over three months ago.
As part of its recovery plan, WazirX will introduce "recovery tokens" for affected users, enabling them to regain 48 per cent of their lost funds initially. These tokens, distributed on a pro-rata basis, can be traded among users, potentially allowing holders to sell them while awaiting full recovery of assets. WazirX expects to resume full trading on its platform by February next year.
How Will The Decentralised Exchange Help Customers?
The decentralised exchange, now in its early development phase, will empower users by placing control of assets entirely in their hands, eliminating the need for intermediaries and reducing the risk of counterparty-related vulnerabilities. Recovery token holders will also have the option to swap these tokens for DEX-specific tokens once the decentralised platform goes live. The company plans to release a trial version of the DEX in the upcoming months, with profits from both the DEX and WazirX channelled back to affected users.
WazirX CEO Nischal Shetty highlighted the growing demand for self-custody solutions in the wake of numerous security breaches on centralised exchanges. Shetty shared that only 13-15 per cent of global crypto trading volumes come from decentralised exchanges, which serve a small fraction of crypto users, underscoring WazirX’s goal to simplify DEX access for the average trader.
More New Features In Pipeline
Alongside the DEX, WazirX’s relaunch will include new features such as crypto staking, an over-the-counter (OTC) desk, and futures trading options, all aimed at boosting revenue to support the repayment plan.
Recover Underway, But Loss Expected
These recovery efforts coincide with a court-approved restructuring process currently underway in Singapore, where WazirX has been granted a four-month moratorium. According to advisors, despite the planned recovery measures, users may face a substantial financial loss of approximately Rs 850 crore, as full reimbursement is unlikely to exceed 57 per cent.
Legal Challenges
WazirX is also dealing with legal challenges from multiple stakeholders, including cases filed with the National Company Law Tribunal and the Delhi High Court. A coalition of more than 30 affected users is expected to bring a joint complaint before the National Consumer Disputes Redressal Commission, reflecting the widespread fallout from the security breach.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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