CoinSwitch Launches INR 600 Cr Recovery Initiative For WazirX Hack Victims

Crypto unicorn CoinSwitch has launched an INR 600 Cr recovery programme to aid users of hacked crypto exchange WazirX that were struck by a massive $230 Mn (INR 1,900 Cr) cyber attack last year.

Through the initiative dubbed ‘CoinSwitch Cares’, the company aims to help affected users offset their losses, deposit funds to take advantage of the ongoing bull run in the crypto market, and earn rewards.

In July 2024, North Korea-based cybercriminals allegedly hacked WazirX, wiping out about $234 Mn in crypto assets from one of its wallets. The cyber attack left more than 4 Mn Indian users with substantial losses and shook the faith in the Indian crypto ecosystem.

The initiative is basically an effort by the crypto platform to acquire the users of WazirX.

During a virtual ‘Ask Me Anything’ session, Ashish Singhal, cofounder and CEO of CoinSwitch, said the company has rolled out the CoinSwitch Cares programme to restore the faith of India’s crypto community. 

Starting today, users impacted by the WazirX hack can upload statements for verification and estimate their losses on the CoinSwitch Cares portal.

The recovery programme will have three segments:

• Assured Signup Rewards: Eligible users can earn up to 10% of the funds deposited via this programme over the next two years. Users impacted by the WazirX hack can either deposit funds to CoinSwitch immediately or wait for the Nischal Shetty-led company to fully resume withdrawals on the platform to reap the benefits of the programme.
• Revenue Redistribution: CoinSwitch plans to pool trading revenue generated from the recovery programme and distribute it to the affected users in proportion to their losses.
• Referral Rewards: In addition to sign up rewards, users can also earn up to 5% of the deposited funds via referral of WazirX hack victims.

As of December 5, 2024, WazirX held liquid assets worth $566.38 Mn. Users have filed for damages worth $546.47 Mn against the company.

It is pertinent to note that CoinSwitch said last year that it would file a lawsuit against WazirX in its pursuit to recover 2% of its funds that are still stuck with the hacked crypto exchange.

As Inc42 reported earlier, WazirX is likely to fully resume crypto withdrawals on the platform by mid-April this year. To resume trading, it is pursuing a scheme of arrangement in Singapore.

The proposed scheme aims to offer liquidity and additional recoveries to WazirX users through rebalancing and tokenisation. As part of the plan, WazirX will release liquid assets worth $284 Mn and issue recovery tokens to all its users upon approval and sanction of the scheme. 

Simultaneously, Zettai Pte Ltd, the parent entity of Zanmai Labs, which operates WazirX, is launching a new decentralised exchange (DEX) to initiate recoveries. The company plans to launch features such as crypto staking and futures trading on the upcoming platform.

In August last year, WazirX revoked the suspension on INR withdrawals on the platform albeit in a staggered manner, capping the limit at 66%.

These developments come at a time when multiple government agencies — including the Financial Intelligence Unit, Intelligence Bureau and the Indian Computer Emergency Response Team (CERT-In) — have launched a probe into the WazirX hack.