Before the July 18, 2024, cyberattack, WazirX was India’s largest cryptocurrency exchange, with over 16 million users. The breach, which was one of the biggest in the crypto industry, siphoned more than $235 million from the exchange’s wallets and forced operations to a halt. Authorities later attributed the heist to North Korea’s Lazarus Group. More than the money, it was confidence in the company’s ability to recover from the stock that took the biggest hit: users’ funds were frozen, withdrawals paused, and trust fractured in India’s crypto community.

After more than a year of legal wrangling, stakeholder outreach and a Singapore-court-backed restructuring, WazirX relaunched operations last month, this time promising stronger security measures, better governance and a renewed push to win back users. In this exclusive conversation with Fortune India, WazirX founder Nischal Shetty reflects on the hack, the lessons the attack forced the team to learn, and the product and governance changes WazirX is implementing to script a strong comeback. Edited excerpts:

1) Manoj Sharma: It's been quite a while since you stayed away from the media limelight. Before the hack, the company was India's biggest crypto exchange. Take us through the period before the hack and after the hack. How has it shaped your thinking, and what has changed in the crypto ecosystem?

Nischal Shetty: A lot has happened in the last 15 months. It's been 15 months since the cyber attack in July 2024. At a broader industry level, crypto prices saw an upward swing; Bitcoin kept going higher. Internationally, Trump's return has had a positive impact on crypto regulation, especially stablecoin rules and the Genious Act, and there's a lot more legitimacy for the sector in the US. In India, I haven't seen major regulatory movement; the main changes were in 2022 with FIU registration and the tax regime.

At the industry level, security has become the most discussed issue after incidents like hacks worldwide. The focus is on preventing attacks and minimising impact. For us, ensuring the safety of funds during the restart was a top goal. When an exchange is attacked, small attacks can be absorbed; a large attack typically leads to liquidation. Liquidation is the default approach, but we believe it's not right when the company hasn't done anything wrong. Liquidation takes a long time, is far more expensive, and effectively ends the business — people take losses that can last two to three years. We wanted to return as much value as possible to users, so restructuring was important: it's faster, less expensive than liquidation, and gives an opportunity to earn back and create value for affected users. We're now in the rebuilding phase. Our strategy was RRR: restructure, restart, rebuild. We finished restructuring and restarting; now we are rebuilding.

2) Manoj Sharma: As the company relaunches the platform and you're offering perks like zero trading fees to drive volume, how is the response? Beyond these short-term measures, what are the long-term product innovations and services the company is exploring, especially with increased competition in India?

Nischal Shetty: The response has been far more positive than we expected. To manage restart dynamics, we took several steps. We knew many users wanted to sell their crypto and that there would be sell pressure; if there aren't enough buyers, prices drop, and users lose money. So we started a campaign 7-10 days before the restart, telling people not to panic sell. We educated users via email, newsletters, and social media and asked them to check international prices before selling.

We did not start all markets together; we began with a limited number of markets to avoid panic selling and to let buyers come in. To attract buyers, we removed trading fees; it's zero fees now, so buyers understand their full amount goes into crypto. Within a few days, prices stabilised and we reached equilibrium. We reached about ₹40-50 crore in trading volume, with significant buying activity.

For product strategy, we've never built features for the sake of features. We focus on quality and what customers actually need. Our spot trading experience is robust and reliable. Going forward, we'll ask customers which features they want and build the most demanded ones, maybe one to three features per quarter rather than 20-30. The ecosystem in India is moving toward staking, futures, and derivatives. We'll prioritise based on demand. Right now, our immediate objective is to stabilise the platform; once that is done, the team will plan new features in the coming weeks.

3) Manoj Sharma: After the hack, WazirX imposed a socialised loss. How has this affected user confidence? What lessons did you learn about fairness and transparency, given social media accusations of unfairness after the hack?

Nischal Shetty: There are many lessons. First response to an attack is to freeze the platform, withdrawals and deposits, to understand what happened, whether it's a hack or a bug. We reported to authorities immediately and engaged a tracing firm, Zero Shadow, since blockchain transactions can be traced. We also worked to get assets frozen; about $3 million was frozen via SWIFT activity.

We proposed a plan where stolen assets would be recovered over time, and a portion would be made available for trading. We ran a poll to gauge sentiment, but coverage led to misunderstandings, so we stopped it. Ultimately, the legal route was restructured in Singapore. Restructuring is a legal process that ensures fair distribution to creditors. Because of the legal process, the scheme provided an 85% return initially and three years to earn back and distribute further funds. The remaining 15% is not capped; if we earn more, creditors get more.

There was negative chatter on social media, but most users who read the scheme supported it. The alternative was liquidation; restructuring is faster and offers a path to recover more value. We followed the legal process, and that's the right approach. Now our responsibility is to build a business that earns back as much as possible and distributes it to creditors.

4) Manoj Sharma: About the legal process, the Singapore court approved the restructuring plan swiftly. What strategies and stakeholder talks made that possible?

Nischal Shetty: For the legal process, we engaged financial and legal advisors in Singapore immediately, since the company and assets were there. I reached out to entrepreneurs who had experienced similar crises. Advisors helped us understand that restructuring was the fastest way to return funds to customers. I learned that a company can recover after losing part of its assets through a restructuring or insolvency process; that was a revelation.

A key legal distinction was whether customer assets were held in trust or whether the relationship was creditor-debtor. In our case, the court agreed it was a creditor-debtor relationship, which has different treatment. Communication was critical: we ran town halls and kept people informed so they understood the legal process and that outcomes would be legally binding. Those were important lessons.

From the pre-hack era, our focus was always on customers and building a product that works, not on boasting feature counts. We'll continue to prioritise quality, reliability, and features users actually need.

5) Manoj Sharma: Can you shed light on the reported setback, amid the court hearing, about moving the company to a Caribbean island? Walk us through that.

Nischal Shetty: Our initial scheme proposed distributing 85% and resetting the exchange, with the India entity handling INR and the Singapore entity handling crypto. Just before the court hearing, Singapore law changed, making it mandatory for companies with crypto business to have a license even if the business was outside Singapore. This rule change came four days before the hearing. The court asked how we would handle licensing; without a license, we couldn't restart.

We proposed moving assets to another entity outside Singapore to avoid delay, but the court saw that as a change to the scheme and rejected it. We then wrote to the Singapore regulator, which said the transfer would be okay, and we asked the court to reconsider. The court revisited the rejection. With the court's approval, we proposed moving crypto to the Indian entity so it could handle both INR and crypto. We re-ran the vote; more people voted and approved the revised scheme. So, the crypto is now with the Indian entity. The timing of the Singapore law change was unfortunate, but we followed the legal process and got approval.

6). What do you think it will take for you to make WazirX the number one crypto exchange in India again?

Nischal Shetty: Stay focused on the customers. We want to be number one, and we will be number one again. The question is, what is the path to choose? I think the path will reveal itself once you know what you want to do. What we want to do is make sure we become number one again so that we generate maximum profits and give it back to our customers.

Now, how do we do it? We’re going to follow our customers’ advice. Whatever they tell us: if they ask for features, we’ll give them features; if they ask for quality, we’ll give them quality. We want to do that and build transparency. Whenever we can, we want to be transparent. This process has also made us transparent:we had to reveal everything, we revealed everything, and we’ll continue to do that. Maybe that builds more trust.

Listening to our customers is going to be our focus. If they tell us to go left, we’ll go left; if they say go right, we’ll go right, because the objective is clear: create value for them so that we can give back to them. That path will lead us. If you have the right intention, the path always reveals itself. That’s what my last 15 months have taught me I didn’t know that a path like this even existed.