WazirX to Relaunch in February 2025
WazirX India’s most popular crypto exchange is planning to resume operations by February 2025 after the huge $235 million security incident that took place in July 2024. WazirX co-founder Nischal Shetty disclosed this relaunch plan at a live town hall, where he outlined the exchange’s holistic recovery plan for compensating liabilities and rebuilding platform trust.
Phase One: Start your recovery strategy.
WazirX’s plan to recover consists of issuing a special “recovery token,” which will be airdropped for users affected. With loss recovery of approximately 48% of the lost user assets, this token can be a good thing for victims. These tokens will be distributed based on a user’s holdings and will be available to trade on WazirX, allowing for some liquidity and a chance to recover funds.
Besides these tokens, WazirX has also incorporated a unique buyback model for the recovery tokens. It will create a sustainable mechanism to carry out token repurchasing, as those fees income from the new service on platform will be used to repurchase tokens to compensate users. This is viewed by managing the resources of the exchange as a way to strengthen the recovery fund and gradually repay users.
Initiatives to generate revenue by providing new services
As part of its relaunch for 2025, WazirX intends to roll out multiple new services that generate revenue. These include:
Staking: Enabling users to earn passive income through cryptocurrency staking.
OTC Trading Desk: A private and high-value trading platform option for users.
Futures Trading: A gateway for users to trade derivatives, which could appeal to retail and institutional investors.
The revenue generated from these services will help to drive the buyback of recovery tokens, helping to recoup lost funds and provide liquidity on the platform over time.
DEXs and Self-Custody Solutions
WazirX says that in line with the increasing demand for self-custody, they are also building a decentralized exchange (DEX) with an internal governance token. The DEX platform will enable the users to hold their own assets while using the WazirX ecosystem, ensuring they remain in full control. This means that with the governance token, users will be able to join decision-making, which should make users more engaged and loyal. This DEX will not only concentrate on revenue (which would be using other cryptos/fiat pairs floating around WRX pairings) but would also contribute to the recovery fund and allow for conversion of both tokens (WazirX: wrx quantity recovery token DEX token). Create a linkage process in WazirX Financials.
Selling partnerships and lawsuits to finance a small fortune
WazirX is reportedly looking out for potential white knight investors to provide rescue funding in order to strengthen its balance sheet position. Such a tactic would actually ensure fresh funds to help with user reimbursements as well as support the restructuring of the company. The exchange is also seeking legal means to retrieve the assets that were taken, showing an effort towards compensation for the users involved. A recent statement of WazirX via X (formerly Twitter) reaffirms its commitment to restore all illiquid and stolen funds for the benefit of creditors.
Compounding WazirX’s recovery process are scrutiny from Indian regulators into the aftermath of the $235 million exploit. The hack led to scrutiny from the Financial Intelligence Unit (FIU), which is attempting to learn exactly how the hack took place. At the same time, 300 irate users of Facebook Ireland have filed a class-action case with the National Consumer Disputes Redressal Commission against the social network, ramping up the situation. Moreover, the Delhi High Court is also hearing two separate legal cases against WazirX.
Considering all these difficulties, WazirX has undergone a restructuring process in Singapore as its parent company Zettai is located there. The exchange also faces pressure to formulate a feasible restructuring plan for its operational and financial stability; in September 2024, a federal court in Singapore granted the troubled exchange four months to do so.
A Resilient Recovery Path
All of these are major challenges. WazirX believes to make the exchange stronger, more useful, and more user-centric, so it has come with a strong recovery plan. To revive the faith of the crypto community, WazirX wants to become a trend setter by being transparent, paying users, and providing new innovative services. The exchange aims to provide a safe environment for users to feel confident about the products they use in the digital asset space, with its relaunch scheduled for February 2025.
In the lead-up to that date, users as well as regulators will be watching closely how committed WazirX is to turning things around and recovering its reputation amongst a global audience of crypto enthusiasts. The way ahead is surely going to be tough, but if WazirX emerges as a winner, then it may offer some direction on how exchanges can recover and bounce back after security breaches of this scale.
