WazirX Will Distribute Assets to Users in Crypto Tokens, Not Fiat or Stablecoins

In a tweet earlier today, Nischal Shetty, founder and CEO of WazirX, India's embattled crypto exchange, revealed a key detail of the company's ongoing restructuring efforts.

Crypto exchange WazirX will distribute assets to users in crypto tokens, not fiat or stablecoins, as part of its ongoing restructuring efforts, a key detail revealed by founder and CEO Nischal Shetty in a tweet today.

Pending approval of the proposed restructuring scheme, users will receive a proportional share of liquid assets based on their token holdings as of July 18, 2024. The plan addresses outstanding creditor claims and ensures distributions match users’ holdings on that date.

“Distribution will be in tokens (as currently visible in your portfolio),” Shetty tweeted. He noted that the exchange’s goal is to “bring back maximum value” for users and creditors in the long term.

According to the FAQ posted alongside Shetty’s tweet, users will be able to calculate their expected claims using the Rebalancing Calculator. The tool will display the USD and INR value of their shares as of 1 PM IST on July 18, 2024. The actual distribution of assets will be done in cryptocurrency tokens, reflecting their value at the rebalancing time.

Four months ago, WazirX was hit by a significant security breach involving one of its multi-signature wallets. The breach led to the theft of over $230 million in tokens, including Shiba Inu (SHIB), Ethereum (ETH), and other assets. Notably, the stolen funds represented more than 45% of the exchange’s total reserves reported in a June 2024 update.

In response to these losses, WazirX initiated a restructuring process in Singapore to address its outstanding debts. Despite efforts to recover the stolen assets, progress has been limited.

Interestingly, the exchange is also exploring the launch of a decentralized exchange (DEX) to reduce counterparty risk typically associated with centralized platforms.

While challenges remain, Shetty’s comments suggest WazirX is focused on maximizing value and rebuilding trust with users and creditors.