Customers of Indian cryptocurrency exchange WazirX, which suffered a $234 million hack in July, are unlikely to recover their full amount through the ongoing restructuring process, the company's general counsel said on Monday.
George Gwee, a director at restructuring firm Kroll, which is working with WazirX, said that at least 43% of all customers’ money on WazirX is unlikely to be recovered. Last week, WazirX asked the Singapore High Court for protection for six months while it restructures its debts.
Gwee told reporters that the best-case scenario would be to return “between 55% and 57% of the funds.” Following the restructuring, WazirX’s priority will be to distribute the remaining token assets to users proportionally through cryptocurrency, he said. The company added that it is in discussions to share profits generated from revenue-generating products, but did not provide specific details.
The hack in July was the largest cryptocurrency theft to date in India, sending shockwaves through the country’s cryptocurrency industry. The company has since struggled to find a way to return customers’ money. In July, the company offered to socialize “force majeure” losses.
At the press conference, WazirX representatives avoided many questions about their efforts to raise capital. The company said it was negotiating with an unnamed white knight, but said it would not raise capital due to its ongoing dispute with Binance, the world’s largest cryptocurrency exchange. Binance and WazirX have been closely linked at some point.
In late 2019, Binance announced the acquisition of WazirX in a blog post, but later denied the claims that it had acquired the company. After the public controversy, the cryptocurrency exchange ended its technology support to the Indian company in 2022.
When asked about Binance’s ownership of WazirX, the Indian company declined to comment. When asked about selling WazirX as part of the restructuring, a company representative said such a sale was not possible.
When asked whether legal action could be taken against Binance and Liminal, the multi-signature wallet providers whose systems were reportedly compromised by hacking, a WazirX representative did not give a clear answer.
Pressure on WazirX is growing after CoinSwitch, another major Indian cryptocurrency exchange, filed a lawsuit against WazirX last week, seeking to recover approximately $9.7 million worth of assets locked up on the WazirX platform.
WazirX's customers include law enforcement agencies in India.
