WazirX presents Recovery Token to Resolve $230M Debt Following Significant Hack

WazirX, the cryptocurrency exchange that was recently the target of a significant breach, is introducing a new “Recovery Token” to resolve its outstanding obligations with creditors.

Following the breach, which resulted in the theft of more than $230 million, WazirX intends to distribute this token to creditors in accordance with their platform balances. This initiative offers a structured approach for users to potentially reclaim a portion of their misplaced funds.

The Recovery Token’s framework encompasses a variety of strategies to increase the platform’s profitability and finance recovery, including asset sales and endeavors to reclaim misappropriated assets.

The token will also include a repurchase option, which will provide liquidity and enable creditors to trade or sell the tokens on the open market, contingent upon market conditions. In the months ahead, WazirX intends to disclose additional information regarding the token’s mechanisms.

In July 2024, the Lazarus Group, a North Korean hacking organization, perpetrated a cyberattack that caused the seizure of nearly $235 million. Before WazirX suspended operations, the hackers exploited vulnerabilities in the platform’s multisig wallet to take funds from both hot and cold wallets. CoinSwitch, a competitor exchange, filed a lawsuit in an effort to retrieve some of the funds that were held as a result of this compromise.

This recovery strategy is reminiscent of an earlier initiative by Bitfinex, which encountered a comparable situation in 2016 following a breach that resulted in the loss of millions of dollars. Bitfinex issued recovery tokens to affected users, similar to WazirX, which enabled them to claim future revenue as compensation.

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