India-based cryptocurrency exchange WazirX‘s legal advisors stated that customers will not be able to fully recover their crypto losses following the $234 million hack in July. Meanwhile, the Singapore High Court will consider WazirX’s request for a six-month protection period.
Customers Can Recover Only 55-57% of Their Funds in Best Case
WazirX’s legal advisors indicated that customers will face at least a 43% loss, with the best-case scenario allowing them to recover only 55-57% of their funds. George Gwee, a restructuring director at Kroll, noted that the hack resulted in a loss equivalent to approximately 45% of customer funds. Access NEWSLINKER to get the latest technology news.
WazirX co-founder Nischal Shetty stated that the current figures are valid as of Monday and that their goal is to reduce this gap. Shetty mentioned, “You may not see this situation right now because we are in the negotiation and idea development phase,” and added that they will be clearer about closing this gap at each stage in the coming weeks.
Jason Kardachi, managing director at Kroll, mentioned that the situation could change with options like the intervention of a ‘white knight’ or the recovery of funds. Kardachi said, “It is highly unlikely that we will fully recover people’s losses in cryptocurrency. Profits we achieve or contributions from third parties may help the recovery process, but considering that half or close to half of the lost cryptocurrencies were hacked, it is unrealistic to think we can fully compensate people’s losses.”
Kardachi noted that if the cryptocurrency market recovers, customers could get more of their investments back in USD terms, but he expressed that the likelihood of increased profitability or cash flows from white knights closing the gap is low.
Impact of Binance Dispute on Calculations
WazirX’s ownership dispute with Binance also affects these calculations. Shetty and the legal advisors mentioned that they could not provide details due to confidentiality restrictions related to this dispute. Kardachi added that 55% of the funds could be returned to customers before the ownership dispute is resolved.
WazirX’s subsidiary Zanmai India, managed by Singapore-based Zettai, requested a six-month protection period from the Singapore High Court to restructure its liabilities following the hack. The court will review WazirX’s request on Tuesday and make a decision.
