- WazirX intends to establish a DEX and recovery token to assist impacted users.
- They plan to complete the restructuring process by February 2025.
On November 6, 2024, WazirX, an Indian cryptocurrency exchange, announced plans to create a decentralized exchange (DEX) and introduce a new crypto token to assist users affected by the July cyber-attack. The theft caused a loss of more than $230 million, leaving many customers with locked cryptocurrency assets.
Following the incident, WazirX implemented controversial measures to block users’ access to their funds. The exchange limited users to trade with 55% of their balance and converted the remaining 45% into Tether (USDT), locking it on the site. Users reacted negatively to the concept, calling it unjust and accusing it of socializing losses.
According to a presentation shared with users, WazirX intends to become India’s largest DEX within the next 12 months. The decision represents a substantial shift for the company, which has currently operated as a centralized exchange. DEXs, unlike centralized exchanges, allow users to keep control of their crypto assets, though they require users to complete their own due diligence on Know-Your-Customer (KYC).
WazirX Plans to Recover Investor Losses Via a New Token
In addition to releasing the DEX, WazirX will generate a new token to provide recovery to affected users. The recovery approach consists of restarting the platform, possibly retrieving stolen assets, and dispersing profits from new ventures. The exchange also intends to realize illiquid assets owned by third parties and seek funds from ‘white knights’ to assist with the recovery effort.
WazirX CEO Nischal Shetty clarified that they will distribute the new Recovery Tokens, a non-stablecoin, to affected customers on a pro-rata basis via airdrop. They plan to set each token’s par value at USD1 and aim to complete the restructuring process, which seeks to recover locked funds, by early February 2025, though the timeline may vary.
Shetty announced intentions to launch a DEX token, which will be used to pay transaction fees and participate in platform governance decisions, to further increase the platform’s decentralization.
As Bitcoin’s price rises to new highs, WazirX investors remain concerned about their inability to access or sell their locked cryptocurrency funds. This new endeavor offers a ray of hope for individuals hoping to recover their losses from the cyberattack and resume trade activity.
