WazirX proposes launching decentralised exchange and recovery token as investors wait to access locked up crypto

WazirX proposed launching a decentralised exchange as well as a recovery token for outstanding debt settlement, as users are unable to access their existing crypto

In a townhall event on Wednesday (November 6, 2024), Indian crypto exchange WazirX and risk advisory firm Kroll announced plans to launch a decentralised exchange (DEX) as well as a new crypto token in order to deliver some recoveries to investors whose existing crypto has been locked up since the July cyber-attack that cost the exchange over $230 million.

According to a deck shared with users, WazirX’s target was to be the largest DEX in India within 12 months.

Unlike centralised exchanges, decentralised exchanges allow users to control the custody of their crypto assets. However, they are more loose with Know-Your-Customer (KYC) protocols, so users have to carry out their due diligence to make sure they are not violating their national or international laws.

In response to The Hindu’s question about how WazirX’s new DEX would be in compliance with Indian laws, CEO Nischal Shetty said WazirX would provide the technology for users to manage their own assets, and that further details were still being worked out.

WazirX will also create a new token in order to deliver recoveries to users, apart from other avenues such as re-opening the platform, potentially recovering the stolen assets, allocation of profits from new ventures, realising the illiquid assets held with third-parties, and potential capital from ‘white knights.’

“Post Rebalancing and initial distribution, Scheme Creditors’ proportion of Scheme Debt that cannot be settled by Net Liquid Assets available will be tokenized (“Recovery Tokens”) and AirDropped into Scheme Creditors’ WazirX User platform balances on a pro-rata basis, based on a par value of USD1 / token,” noted a deck that WazirX and Kroll shared.

However, this is not a stablecoin, Shetty clarified.

As Bitcoin hit a new all-time-high of $75,000 on the back of Trump wining the U.S. presidential election, many WazirX crypto users are stressed about being unable to sell their BTC.

The restructuring process is currently estimated to take until early February next year, though this is subject to change.

Published - November 07, 2024 01:35 pm IST