Homegrown crypto exchange WazirX's creditors have stated that users will be able to receive stolen crypto funds as early as April 2025, provided they approve the restructuring and scheme. However, if the scheme is not approved, the company estimates it could take years (with a tentative deadline of 2030) due to unclear and extended timelines. "Two paths, two very different outcomes. Here's a breakdown of what happens if the scheme is approved versus if it isn't. Understand what to expect in both scenarios as we approach the voting process," the company said in a statement on X. Sources indicate that creditors will soon vote on the restructuring plan, with the exact date to be announced in the coming days.

WazirX suffered a massive cyberattack in July 2024, resulting in the theft of around $230 million in digital assets. Hackers exploited vulnerabilities in the multisig wallet, leading to the suspension of its operations and the halting of trading and withdrawals in the same month.

WazirX has attributed responsibility for the $230 million hack to the North Korean Lazarus Group, which is infamous for high-profile cyberattacks on cryptocurrency exchanges. The United States, Japan, and South Korea, in a joint statement, also identified the Lazarus Group as responsible for the cyberattack on the exchange.

The crypto exchange stated that if creditors approve its restructuring plan, and it is further sanctioned by the Singapore court, the platform will resume operations, and asset distribution to creditors will begin with the implementation of new business (DEX). With this plan, the company aims to improve recoveries via profit sharing, recovery of illiquid wallets and stolen assets, and "white knight" collaborations.

If the restructuring plan is not approved, creditors will have to wait for the ownership dispute to be resolved before any next steps can be taken, which makes the situation unclear and could lead to extended timelines. "If a liquidation occurs before the ownership dispute is resolved, the first asset distribution will be significantly delayed compared to a restructuring and will likely be in fiat. The company also states that the distribution will likely be materially lower due to liquidation costs and without improved recovery from profit sharing."

The company noted that the process also makes fund recovery "unclear" and could extend timelines in a liquidation scenario. "Creditors are likely to miss any near-term bull runs. As fiat is distributed, market price-driven upside following distributions is unlikely," said WazirX.

On January 23, 2025, the Singapore High Court granted the company leave to convene a scheme meeting to distribute net liquid platform assets and resume operations. The court also granted a 16-week moratorium to Zettai Pte Ltd, the parent company of WazirX, which provides the necessary time and legal protection to carry out the restructuring process.

"The court found that there was no abuse of process and also observed that there was no proper or sufficient evidence presented before the Court of wrongdoing or misconduct, contrary to suggestions made by certain users of the platform that Zettai had orchestrated the cyberattack," WazirX stated earlier.

WazirX's approved scheme

The approved scheme includes components such as debt restructuring, token distribution, recovery token implementation, and platform reactivation. The scheme outlines an approach for reorganising the liabilities associated with WazirX to optimise returns for platform users. The rebalanced platform's liquid assets will then be distributed in tokens to scheme creditors within 10 business days of the effective scheme date.

The scheme also involves the issuance of recovery tokens (RTs) and the distribution of recoveries through RT purchase mechanisms. Upon the reactivation of the WazirX platform, the company stated that the available net profits generated over the next 36 months would be used to fund recovery token purchases.

'Voting YES will unlock faster access of assets'

WazirX, in a statement shared post filing of the report on Wednesday, said the proposed Scheme of Arrangement offers the best path to recovery after the July 2024 North Korean cyberattack. "Voting YES will unlock faster access of assets to users. Within 10 business days of the scheme being effective, users will get the first disbursement. This will happen on a pro rata basis. Currently, the value of the same is almost 80-85% of the claim amount for all users."

The distributions will be in cryptocurrency, which will allow users to benefit from future market upswings. "It also includes profit sharing from future WazirX operations and ongoing efforts to recover the stolen funds, over the next 3 years," says the company.

The company emphasises that a "YES" vote will ensure a "legally binding, transparent process" overseen by the Singapore Court, and will avoid costly and lengthy legal battles, which could further delay any payouts. "Voting NO means longer waiting times, lower recoveries distributed in fiat where users lose out on gains from crypto, and there is no certainty of the outcome either."