WazirX Introduces Recovery Token to Settle $230M Debt After Major Hack

WazirX, the cryptocurrency exchange recently targeted by a major hack, is rolling out a new "Recovery Token" to settle its outstanding debts with creditors.

Following the breach, which saw over $230 million stolen, WazirX aims to distribute this token to creditors based on their platform balances. This initiative provides a structured method for users to potentially recover some of their lost funds.

The Recovery Token’s framework involves a range of strategies to boost the platform’s profitability and fund recovery, such as asset sales and efforts to reclaim stolen assets.

The token will also feature a buyback option, offering liquidity and allowing creditors to trade or sell the tokens on the open market, depending on market conditions. WazirX plans to release further details on the token’s mechanics in the coming months.

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The hack, attributed to North Korean hackers from the Lazarus Group, occurred in July 2024 and resulted in the theft of nearly $235 million. The hackers exploited vulnerabilities in the platform’s multisig wallet, draining funds from both hot and cold wallets before WazirX suspended operations. This breach led to a lawsuit from rival exchange CoinSwitch to recover some trapped funds.

This recovery strategy mirrors an earlier initiative by Bitfinex, which faced a similar situation in 2016 after a hack drained millions in funds. Like WazirX, Bitfinex issued recovery tokens to affected users, allowing them to claim future revenue as compensation.