Key points:
- WazirX CEO Nischal Shetty steps forward for an interview for the first time since the hack.
- WazirX users received 85% of their portfolio value, calculated by the value on the rebalancing date.
- A cost fund is created from the remaining exchange assets. Legal and operational expenses were covered from the cost fund.
WazirX, a popular Indian cryptocurrency exchange, suffered a $234 million hack in July 2024 that shocked the Indian cryptocurrency community. The exchange has maintained internal transparency through announcements on X, but the CEO and leadership team have not appeared publicly to answer any direct questions.
The community became uneasy as many users were concerned about refunds and operational stability. In addition, the comments section on the exchange’s social media platform X was disabled, limiting open discussion, which increased uncertainty among users.
For the first time since the hack, WazirX CEO Nischal Shetty has come forward to answer important questions about the recovery process in an interview with Switch, an Indian podcast channel that falls under Zee Production. In the interview, Shetty also spoke about discrepancies in payments, the use of funds to cover operational and legal costs and to protect future assets.
How much refund do WazirX users get?
In the interview, the host asked Shetty why users are not fully compensated, considering that token prices have gone up Increase since breakout. The implication was that the losses could have been recovered through rising market value, so why haven’t users been fully repaid yet?
The CEO replied that during the hack about $234 million was stolen, and for the remaining tokens the price had increased. There has been an outcry from users to freeze their wallets so as not to miss out on the winnings. Hence, the rebalancing was implemented on January 17, 2025. In the rebalancing scheme, it was decided that the exchange would distribute 85% of the users’ wallet value and the remaining 15% would be returned within the next 2-3 years.
The interviewer then went on to ask that many users received approximately 20-30% of tokens instead of the promised 85% of tokens and what was the reason behind this deficit. In response, the CEO replied that according to the rebalancing scheme, this 85% is calculated by the total value of the user’s wallet on the rebalancing date (January 17, 2025), not the number of tokens they own.
Between the rebalancing date and the payment date, cryptocurrency prices went up and down. Some tokens lost values due to users receiving fewer tokens than expected. Other tokens rose, so the number of tokens varied. Some users made gains because their token prices went up after rebalancing, so they got more value and stayed quiet. Those who lost out due to their token being down, raised complaints. The plan gave 85% of the portfolio value, but price changes made the amounts vary.
Shetty clears allegations of embezzlement of user funds
In the interview, Nischal was asked if any of the users’ funds were used to fight the legal battle in Singapore, where this rearrangement scheme was introduced. Nischal very calmly explained where the cost fund was created. According to his statement, the fund was created from the funds remaining in the exchange’s wallets after the hack. He further explained that it was used to cover operational and legal costs related to the recovery and rearrangement plan. Shetty also added that no deposits were used for the private company. All spending followed a clear path to keep the exchange running while making sure users could get their withdrawals.
He stressed that the cost fund does not represent a misuse of funds but is a necessary step to keep the stock exchange running. He said: “If we had not done that, the stock exchange would have stopped completely, and the recovery and withdrawal process would have been delayed.” He also assured users that customer funds remain as segregated as possible given the situation after the hack.
Future outlook
The remaining 15% of user funds in WazirX’s recovery plan will be returned gradually over the next two to three years. This phased approach was chosen so that WazirX could restore the full value of users’ wallets. Also in this interview, a maximum of 15% was not specified, so if WazirX recovers more value than expected, users may get more. The plan is approved by the court and is designed to be faster and less disruptive than liquidating the company.
WazirX has also partnered with BitGo to secure user funds through institutional custody, including multi-signature wallets and insurance coverage. The move also supports transparent distribution of funds as part of WazirX’s post-hack recovery plan.
Also Read: WazirX Begins Fee-Free Phased Trading Rollout for 30 Days