WazirX Users Frustrated: DEX or Delays in $500M Hack Recovery?

Indian crypto exchange’s hacked users must decide between partial recovery via a decentralized platform or prolonged uncertainty.

WazirX’s Ultimatum: Restructure or Wait Indefinitely

Hacked Indian crypto exchange WazirX has ignited fury among users with a high-stakes proposal: endorse a new decentralized exchange (DEX) initiative or endure a minimum five-year wait for fund recovery. The platform, which lost millions in a 2024 breach, outlined two paths for creditors in a recent social media post—sparking outrage over transparency and timelines.

The Two Paths for Creditors

1. Option 1: Approve the DEX Proposal
   • Immediate Payout: 80-85% of funds distributed within 10 business days of court approval (target: April 2025).
   • Future Compensation: “Recovery tokens” issued for remaining claims, tied to the DEX’s profits over 36 months.
   • Catch: No clarity on profit-sharing percentages or eligibility criteria.
2. Option 2: Reject the Plan
   • Fiat Refunds: Funds returned in traditional currency, but timelines are vague (“potentially extended”).
   • Legal Delays: Singapore court proceedings could stretch beyond five years, per WazirX’s warning.

Community Backlash and Skepticism

Despite framing the DEX route as the “green” choice, WazirX faces intense criticism:

• Disabled Comments: The exchange’s X post barred user feedback, fueling distrust.
• Social Media Outcry: Users labeled the plan a “joke,” demanding executives liquidate personal assets for faster repayments.
• Unanswered Questions: How will profits be tracked? Who qualifies for tokens?

Expert Take: High Risk, Low Clarity

Crypto legal analyst Rohan Mehta warns:
“WazirX’s proposal shifts risk to users. Recovery tokens depend on a DEX’s success—a venture with no proven track record. Creditors must weigh immediate partial payouts against gambling on future profits.”

What’s Next? Key Dates & Steps

• Vote Deadline: Creditors must decide by March 2024.
• Court Hearing: Singapore court to review the plan in April 2025 if approved.
• User Action: Audit claims, consult legal advisors, and pressure WazirX for transparency.

Broader Implications for Crypto Exchanges

WazirX’s dilemma mirrors challenges faced by Mt. Gox and QuadrigaCX users, where prolonged liquidations left victims waiting years. This case could set a precedent for hacked platforms prioritizing restructuring over traditional refunds.

Recommendations for Creditors

1. Assess Risk Tolerance: Is 80% now better than 100% later?
2. Demand Transparency: Push WazirX to disclose profit-sharing terms.
3. Legal Recourse: Explore collective action if terms seem exploitative.

Final Note: This article is informational. Consult a financial advisor before deciding.