Indian crypto exchange WazirX, which suffered a major security breach last year losing $234 million of users funds, is now planning to issue Recovery Tokens (RT) to distribute recovered assets to its users.
The exchange’s founder, Nischal Shetty, revealed the plan on Tuesday, adding that the tokens may be listed for trading. Subject to interest from users, this would offer a chance for liquidity and market exposure.
“We will issue RT tokens and use them to distribute any future recovered funds to token holders,” he wrote. “If enough people are interested, we may also list RT tokens for trading.”
Shetty further said in a statement that this is one of the fastest distribution processes in the history of the crypto industry via a scheme of arrangement.
WazirX’s First Token Distribution
WazirX introduced RTs as part of the recovery scheme, meant to help users recover their funds. The creditors-first approach is designed to maximize recoveries and align long-term value with market opportunities.
The news follows WazirX’s completion of rebalancing process for Net Liquid Platform Assets (NLPA). “The NLPA has been rebalanced to match the token denominations of the Platform’s assets with its liabilities,” a company statement read.
“Rebalanced portfolio is now live on WazirX. All the tokens listed on the rebalanced page will be part of the first distribution when platform restarts,” Shetty wrote on X.
Jason Kardachi, Managing Director and Co-Head of Kroll’s global restructuring practice commented on the development.
“The successful completion of the Rebalancing process underscores the importance of careful planning, collaboration, and a dedication to fairness,” he said in a press releases shared with Cryptonews.
He added that the approach has maximized transparency and precision throughout.
Additionally, the exchange has also published its preliminary creditor list and snapshot of user balances on July 18.
“Creditors can now check their claim amount in USD using a unique UUID,” WazirX wrote in a post on February 9. The list has been ordered by descending value of claims and can be searched using UUID.
In January, WazirX secured approval for its restructuring plan from the Singapore High Court. WazirX’s parent company, Zettai filed the restructuring plan that aims for creditor recovery and avoiding liquidation through a court-supervised process.
If approved, WazirX creditors will receive compensation in the form of tokens rather than fiat currencies, allowing possible price appreciation.
Additionally, the scheme envisages subsequent distributions over a period of 3 years as more assets are realized from Illiquid Asset recoveries, including the Stolen Tokens, the release noted.
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