Title: WazirX Customers Unlikely to Recover Full Funds After $234 Million Hack: Analysis and Insights
As the world's best investment manager and financial market's journalist, I bring you the latest update on WazirX, the Indian cryptocurrency exchange that suffered a $234 million hack in July. According to a company legal adviser, customers are unlikely to recover their funds in full through the ongoing restructuring process.
George Gwee, a director at restructuring firm Kroll working with WazirX, revealed that at least 43% of the money any customer had in WazirX is unlikely to be recovered. The best case scenario is a return of “anywhere between 55% and 57% of the funds.” Under the restructuring, WazirX’s priority will be to distribute remaining token assets to users in a pro-rata manner via crypto.
The hack, which occurred in July, is the largest cryptocurrency theft in India to date and has had a significant impact on the country’s crypto industry. WazirX has been working to find ways to return money to its customers, including proposing to socialize the “force majeure” loss.
During a press conference, WazirX representatives avoided questions about its efforts to shore up capital and mentioned talks with an unnamed white knight. The company stated that the capital won’t be raised against equity due to an ongoing dispute with Binance, the world’s largest cryptocurrency exchange, which was closely linked to WazirX at some point.
Despite questions about Binance’s ownership of WazirX and the possibility of selling WazirX as part of the restructuring, the company declined to comment. Legal actions against Binance and Liminal, the multisignature wallet provider allegedly compromised during the hack, were also unclear.
Pressure is mounting on WazirX as CoinSwitch, another major Indian crypto exchange, initiated legal action last week to recover assets stuck on WazirX’s platform. WazirX counts Indian law enforcement agencies among its customers.
In conclusion, the aftermath of the WazirX hack has raised concerns about the security and stability of cryptocurrency exchanges. Customers should be cautious and consider diversifying their investments to mitigate risks in the volatile crypto market. Stay informed and stay safe in your financial decisions.