Why WazirX Matters

Mumbai, 28th February 2025: The existing crypto ecosystem in India is less than a decade old. In 2018, globally, the crypto market was experiencing huge investments, with billions of dollars poured into Bitcoin. During this time, crypto enthusiasts in India were waiting for a channel that would open a route for them to participate in the Bitcoin bull run. This was the time when WazirX opened an exchange that allowed users to have easy access to Bitcoin, Ethereum, and other cryptocurrencies.

For WazirX, the stakes were far bigger due to regulatory issues in the country. A month after the launch, the RBI regulatory sword dropped, directing all regulated entities, including banks, to stop dealing with individuals and businesses dabbling in virtual currencies. This move by the RBI, at a time when the crypto market was witnessing its initial growth, brought the entire Indian crypto ecosystem to the brink. But WazirX innovated new trading options, reducing the roadblocks for crypto trading for enthusiastic investors. WazirX democratised crypto access for Indians alongside sharing adequate knowledge around digital assets with all stakeholders.

The platform continued to be a top choice for investors in India and saw the highest trading volume and liquidity of any exchange till July 2024, when it suffered a $235M cyber attack by North Korean hackers.Recently, this was also confirmed in a joint statement released by the US, Japan and South Korea that the North Korean-based Lazarus group was behind the attack.

Understanding WazirX’s importance is crucial for the future of the Indian crypto ecosystem. Its contributions to the initial adoption of cryptocurrencies in India and its ability to withstand challenges demonstrate why it remains a key player in shaping the country’s crypto journey.

How WazirX Helped in the Growth of Indian Crypto Eco

When Indian crypto exchanges were targeting Metros and Tier-I cities of India, WazirX made the cryptocurrency trading democratic by introducing it to the masses, especially in Tier-2 and Tier-3 cities. They created a user-friendly platform allowing crypto trading in the most simplistic manner, which enabled millions of Indians to participate in the crypto revolution.

Over the years, one after another, the platform achieved several milestones, such as building a community of millions of registered users and establishing itself as one of the most trusted crypto exchanges in the country.

The Hacking Incident that Affected us All

By 2024, WazirX was at the pinnacle with 15 million users, the highest in the Indian crypto ecosystem. On July 18, 2024, the hacking incident happened and $230 million were stolen from its Ethereum wallet. The hacking incident was a major blow to the platform, impacting users and shaking their confidence. The company responded by taking swift measures to enhance security, including deploying additional safeguards and conducting thorough audits.

Post the hacking incident, the company also faced a compounded, coordinated attack fueled by misinformation campaigns. These efforts have hindered the recovery process, ultimately working against the best interests of the impacted users.

WazirX Plan for Fund Recovery

WazirX has outlined a comprehensive plan to recover user funds following the cyberattack. The proposed recovery strategy hinges on a structured token distribution mechanism, aimed at ensuring equitable and timely restitution for affected users.

The plan involves distributing tokens shortly after the recovery scheme is approved by creditors through voting, scheduled between 19th March and 28th March, 2025. Through these token distributions, the company aims to return 85% of the value of users’ account balances at the time of the cyberattack. Initial distributions will be executed within 10 business days of the scheme’s approval and activation.

To address remaining claims, creditors will receive recovery tokens (RT Tokens) representing their outstanding balances. These tokens will be periodically repurchased using profits generated from the platform’s operations and the proposed decentralized exchange (DEX), ensuring a steady repayment stream over a period of 36 months.

However, the most important thing for the plan to realise is the “Restructuring” process. If the restructuring plan is not approved, creditors will face uncertain and prolonged timelines for fund disbursal, which could result in delays of up to 4–5 years. The ownership dispute with Binance presents more uncertainty.

Should liquidation occur after the resolution, distributions will be significantly postponed, likely in fiat as opposed to token distributions from the scheme, which again could be reduced in value due to liquidation expenses, with no enhancement in recovery from profit-sharing. Furthermore, creditors may miss out on upcoming market rallies, and won’t get any benefits from the RT token.

Industry Comparison

This situation is not unprecedented in the industry. For instance, Mt. Gox users have been waiting for over 10 years for compensation, with no clear resolution in sight. Similarly, FTX recovery efforts have been ongoing since 2022, spanning more than three years. Creditors of FTX have been waiting for 3 years for their funds which will be distributed in Fiat. As a result, they will not benefit from the recent surge in Bitcoin’s price, highlighting the potential downside of delayed and fiat-based distributions.

Why WazirX Needs Community Support

Unfortunately, there have been many negative voices online trying to hamper the restructuring process. It’s imperative for users  to conduct independent research, read and understand the scheme, and make informed decisions about it, rather than being swayed by noises and incorrect opinions.

WazirX’s recovery is not just about the survival of one platform; it is about the health and growth of India’s entire crypto ecosystem. The fall of WazirX could set a dangerous precedent, discouraging Indian investors from dipping their toes into new asset classes. It is essential for the community, regulators, and stakeholders to collaborate and support platforms like WazirX, which has been a victim of cyber attack.

Users and stakeholders also have a crucial role to play in rebuilding trust. Constructive feedback, continued engagement, and a shared vision for the future can help ensure the recovery and growth of WazirX, ultimately strengthening the entire Indian crypto ecosystem.

WazirX is more than just an exchange; it is a symbol of resilience and innovation in India’s crypto journey. While the platform has faced significant challenges, its contributions to the ecosystem and its potential for future growth make it irreplaceable.