WazirX’s Restructuring Plan Gains Strong Creditor Backing After $230 Million Cyber Attack

WazirX, an Indian cryptocurrency exchange, has secured overwhelming support for its restructuring plan, following a devastating $230 million cyber attack attributed to the notorious Lazarus Group. With 93.1% of creditors by count and 94.6% by value endorsing the scheme, WazirX aims to navigate its path to recovery, targeting up to 85% recovery of claims for its creditors.

• 93.1% creditor approval by count, 94.6% by value
• $230 million loss from cyber attack
• Up to 85% creditor recovery expected
• Plans to launch decentralized exchange

The voting, held from March 19 to March 28, 2025, was facilitated by Kroll Issuer Services and independently verified by Alvarez & Marshal. Henry Chambers and Joshua Taylor from Alvarez & Marshal ensured the integrity of the process, reflecting the transparency and trust central to WazirX’s recovery strategy. A “restructuring plan” is essentially a financial recovery strategy that helps a company reorganize its debts and assets to better manage its financial situation.

The cyber attack, executed by the Lazarus Group, known for sophisticated hacking, led to significant losses. This prompted Zettai Pte Ltd, WazirX’s parent company, to seek restructuring through the Singapore High Court. Despite initial skepticism, the high approval rates surpassed the legal requirement of a majority by count and 75% by value, showcasing a unified creditor base eager for recovery. Here, “by count” refers to the number of creditors who voted in favor, while “by value” refers to the total value of claims represented by those creditors.

Nischal Shetty, founder of WazirX, expressed his gratitude for the support, stating:

“This consistent support across our entire base demonstrates shared belief in our restructuring approach and recovery plan.”

This sentiment underscores the optimism surrounding WazirX’s future, even as it navigates the complexities of asset redistribution and legal challenges.

However, the restructuring plan faces criticism. The Delhi High Court has issued a notice regarding the plan due to concerns from some users, highlighting potential legal hurdles. The petitioners claim that unaffected assets worth approximately ₹4,400 crore are being subjected to rebalancing and liquidation, which could complicate the recovery process. This situation emphasizes the importance of addressing the concerns of all stakeholders, not just the majority.

Despite these challenges, WazirX is moving forward. The next steps include filing for court sanction with the Singapore High Court and beginning asset distribution within 10 business days. In a move that aligns with broader industry trends toward decentralization, WazirX plans to launch a decentralized exchange (DEX). A DEX is a platform where crypto trades occur directly between users without a central authority, promising greater security and user control over assets. Additionally, WazirX intends to issue recovery tokens, a novel approach to facilitate the recovery process.

This restructuring effort by WazirX is not just about recovering from a cyber attack; it’s a testament to the resilience and adaptability of the cryptocurrency sector. As the industry continues to face cybersecurity threats, WazirX’s approach offers a blueprint for recovery and innovation, balancing the promise of decentralized solutions with the realities of regulatory scrutiny and creditor expectations.

But let’s not forget the dark side of this story. The cyber attack is a stark reminder of the vulnerabilities that plague even the most established exchanges. It’s a wake-up call for the entire crypto community to prioritize security and transparency over hype and speculation. As we champion the ideals of decentralization and freedom, we must also confront the harsh realities of fraud and mismanagement that can undermine our progress.

And while WazirX’s plan to launch a DEX is a step in the right direction, we must remain vigilant. Decentralization is not a silver bullet, and the road to recovery is fraught with legal and technical challenges. But if WazirX can navigate these waters successfully, it could set a precedent for how exchanges can rebuild trust and secure their future in the evolving crypto landscape.

Navigating a cyber attack recovery is like trying to rebuild a sandcastle after a surprise wave hits – it takes patience, creativity, and a lot of shoveling. Let’s hope WazirX can build back better and stronger.

Key Takeaways and Questions

• What was the approval rate for WazirX’s restructuring plan?

  93.1% by count and 94.6% by value of creditors supported the plan.

• How much did WazirX lose due to the cyber attack?

  WazirX lost $230 million due to the cyber attack.

• What is the expected recovery rate for creditors under the approved scheme?

  Creditors are expected to recover up to 85% of their claims.

• Who verified the voting process for WazirX’s restructuring plan?

  Alvarez & Marshal, a global professional services firm, verified the voting process.

• What are the next steps for WazirX following the approval of the restructuring plan?

  WazirX will file for court sanction with the Singapore Court and begin asset distribution within 10 business days, while also planning to launch a decentralized exchange.