WazirX launches decentralized exchange and renewal platform with new features after cyber attack

WazirX has announced plans to launch a decentralized exchange (DEX) and resume operations of its platform. The move is aimed at helping compensate users affected by a large-scale cyber-attack in which the company’s multi-signature wallet was hacked, resulting in losses worth Rs 2,000 crore. The new DEX and revamped platform will introduce features such as crypto staking, an over-the-counter (OTC) desk and futures trading, creating revenue streams aimed at compensating affected users.

Recovery tokens to compensate users

To help users affected by the hack, WazirX plans to issue “recovery tokens” to creditors, representing 48 percent of their lost funds. Distributed on a pro-rata basis, these tokens offer users flexibility: they can be traded for immediate compensation or held with the expectation of long-term recovery through future platform profits. This approach is intended to give affected users access to some liquidity while providing a path to possible full recovery.

Focus on decentralized finance

According to WazirX founder and CEO Nischal Shetty, the new DEX will provide an easy-to-use interface, similar to centralized exchanges, making decentralized trading more accessible. Shetty noted a growing preference among crypto users for self-custody, where individuals maintain control over their assets. This trend aligns with the security benefits of DEXs, which allow users to manage their transactions and assets directly without having to rely on a centralized system that is vulnerable to attack.

Despite the growing interest in DEXs, decentralized exchanges currently represent only 13-15 percent of global crypto trading volumes and are used by less than 5 percent of the world’s crypto traders. WazirX wants to tap into this market while encouraging more users to adopt self-control.

WazirX expects to roll out the new platform and a test version of the DEX in February. Users who own recovery tokens will have the option to exchange them for DEX tokens, linking the company’s compensation strategy with decentralized financial innovations. The profits generated by both the new DEX and the updated WazirX platform will be used to repay creditors.

In its efforts to recover from the attack, WazirX is operating under a restructuring moratorium granted by a Singapore court. However, financial advisors warn that despite these efforts, only about 57 percent of losses can be recovered, potentially leaving users with irrecoverable losses of about Rs 850 crore.