Key Highlights:
- WazirX CEO Nischal Shetty comes forward for an interview for the first time since the hack.
- WazirX users have received 85% of their portfolio value, calculated by value at rebalancing date.
- A cost fund was created from the remaining exchange assets. Legal and operational expenses were covered from the cost fund.
WazirX, a well-known Indian cryptocurrency exchange, suffered a $234 million hack back in July 2024 that shocked the Indian crypto community. The exchange maintained internal transparency through announcements on X, but the CEO and leadership team did not make any public appearances to answer any questions directly.
The community grew uneasy as many users were anxious about fund recovery and operational stability. Additionally, the exchange’s social media platform X had the comment section disabled, which limited open discussion, and this added to the uncertainty among the users.
For the first time ever since the hack, WazirX CEO Nischal Shetty has come forward to answer important questions about the recovery process in an interview with Switch, an Indian podcast channel that falls under the Zee Production. In the interview, Shetty also talks about discrepancies in the payouts, use of funds for operational and legal costs and future asset protection.
How Much Refund Did WazirX Users Get?
In the interview, the host asked Shetty why users had not been fully reimbursed, keeping in mind that the token prices have increased since the hack. The implication was that the losses would have been recovered through market appreciation, so why were the users yet not paid back in full yet?
To this the CEO replied that during the hack around $234 million was stolen, and for the remaining tokens the price appreciated. There was a user outcry to freeze their portfolio so that they do not miss out on the gains. Hence, the rebalancing was carried out on January 17, 2025. In the scheme of rearrangements, it was decided that the exchange will disburse the 85% of the user portfolio value and the rest of the 15% will be returned in the next 2-3 years.
The interviewer then proceeded and questioned that many of the users have received almost 20-30% of the tokens instead of the promised 85% of the tokens and what was the reason behind this deficit. To this, the CEO replied that according to the rearrangement scheme, this 85% is calculated by the total value of the user’s portfolio on the rebalancing date (January 17, 2025), not the number of tokens they hold.
Between the rebalancing date and the payout date, cryptocurrency prices moved up and down. Some tokens lost values due to which users received fewer tokens than expected. Other tokens surged, so the token count varied. Some users gained because their tokens went up in price after the rebalancing, so they got more value and are quiet. Those who lost because their token dropped, raised complaints. The plan gave 85% of portfolio value, but price changes made the amounts vary.
Shetty Clears User Fund Misappropriation Allegations
In the interview, Nischal was asked if any of the user funds were used for fighting the legal battle in Singapore, where this rearrangement scheme was filed. Nischal very calmly explained from where the cost fund was created. According to his statement, the fund was created from the money left in the exchange’s wallets after the hack. He further clarified that it was used for operational and legal costs that were related to the recovery and rearrangement scheme. Shetty further added that no deposits were used for the company’s own benefit. All of the spending followed a clear path to keep the exchange running while making sure users could get their withdrawals.
He emphasized that the cost fund was not misuse of funds but a necessary step to keep the exchange running. “If we had not done this,” he said, “the exchange would have stopped completely, and would have delayed the recovery and withdrawal process.” He further assured users that customer funds were still kept separate as much as possible given the situation after the hack.
Future Outlook
The remaining 15% of the user fund in WazirX’s recovery plan will be returned gradually over the next 2-3 years. This phased approach has been chosen so that WazirX can restore the full value of user portfolios. Also in this interview, the 15% is not capped, so if WazirX recovers more value than expected, users may receive even more. The plan was approved by the court and designed to be faster and less disruptive than liquidating the company.
WazirX has also partnered with BitGo to secure user funds with institutional grade custody, including multi-signature wallets and insurance coverage. The move also supports transparent fund distribution as part of WazirX’s post hack recovery plan.
Also Read: WazirX Starts Phased Trading Rollout with No Fees for 30 Days
