CoinSwitch announced on Tuesday, January 7, the launch of a recovery initiative aimed at supporting distressed WazirX users who suffered losses in a hacking incident in July 2024. The initiative, branded as ‘CoinSwitch Care,' aims to facilitate the recovery of at least ₹600 crore for affected users over the next two years. Eligible WazirX users can access the initiative's benefits by visiting the CoinSwitch website. Meanwhile, WazirX is preparing to present its restructuring plan in a Singapore court on January 22, after which it plans to extend the proposal to its creditors.
CoinSwitch plans to employ a combination of financial support and revenue redistribution to help WazirX users recover a portion of their losses, leveraging the current market bull run, the exchange announced.
To begin the recovery process, affected WazirX users must upload their loss statements to the CoinSwitch Care portal. Following this, they can deposit funds into their CoinSwitch accounts in either cryptocurrency or INR.
The programme offers rewards such as a sign-up bonus of up to Rs.15,000 per user and referral bonuses of up to Rs. 10,000 per user. Additionally, trading revenue generated on CoinSwitch through this initiative will be pooled and distributed proportionally among affected users, based on the extent of their losses.
How This Rs. 600 Crore Recovery Initiative Is Designed to Work
In conversation with Gadgets 360, a CoinSwitch spokesperson explained that the upfront fee paid to the users as signup bonus and referral bonus is ~ Rs 250 core. The commission that CoinSwitch expects to generate from these users over the next two years is ~Rs 350 crore. This is arrived at using the average trading volume of CoinSwitch users and the average commissions charged on the platform.
“While we have estimated the total reward to be ~ Rs 600 crore, it is possible for the users to end up earning more than Rs 600 crore as well if the market continues to do as well as it has done in the last few months,” the spokesperson said.
CoinSwitch has published a guide for WazirX users looking to try recovering funds thorough this initiative. Eligible users will be required to complete KYC on CoinSwitch to be part of this initiative.
Speaking to Gadgets 360, CoinSwitch's co-founder and CEO Ashish Singhal said, “the need of the hour is to rebuild trust with the Indian crypto users who have been affected by the cyber-attack. A player can only survive if the industry is thriving.”
Singhal announced this initiative on LinkedIn and X as well – where the development has garnered mixed responses. While some have lauded CoinSwitch's move, others have called it a marketing gimmick.
What's Happening With WazirX?
WazirX's parent entity Zettai is waiting an approval from the Singapore Court to present its restructuring scheme to its creditors. If the court allows the proposal to proceed, the scheme will require at least 75 percent approval from creditors to take effect. Only with this majority vote will the restructuring plan be implemented.
A WazirX wallet, placed under the oversight of Liminal Custody, was allegedly hacked on July 18, 2024. A total of over $230 million (roughly Rs. 1,900 crore) were stolen in this incident. Both WazirX and Liminal cited internal investigations and denied a security lapse from their respective ends.
The lost funds have not been traced as of yet. The entity responsible for this incident also remains unidentified for now.
