WazirX Bounces Back: Recovery Tokens Issued as Exchange Resumes Operations

After a period of operational silence, Indian crypto giant WazirX is back online—and it's bringing users a digital olive branch in the form of recovery tokens. The move signals a push to rebuild trust and restore normalcy on the platform.

The Comeback Playbook

Resuming services isn't just about flipping a switch. For exchanges facing disruptions, the real challenge lies in managing user assets and confidence. WazirX's token-based recovery mechanism represents a structured attempt to address outstanding balances and operational hiccups—a process more transparent than the classic 'trust us, we're working on it' approach seen elsewhere in fintech.

Tokens as a Bridge

These recovery tokens aren't meant to trade; they're placeholders. Think of them as an IOU on the blockchain, a cryptographic promise to make users whole. It's a pragmatic solution that allows the platform to restart core functions while formally acknowledging and quantifying what's owed—a necessary step before any real value can flow back to wallets.

The Road to Normalcy

Withdrawals, deposits, and trading are reportedly coming back online in phases. The success of this restart hinges on execution. Can the platform process the backlog without new issues? Will the recovery tokens convert to real assets seamlessly? The market is watching, as always with a hint of skepticism—after all, in crypto, 'recovery' is sometimes just a fancy word for 'delayed disappointment.'

WazirX is making its move. Users get a token of goodwill, the exchange gets a second chance, and the broader industry gets another case study in crisis management. Whether this is a genuine turnaround or just financial theater remains to be seen.

WazirX completes recovery tokens issuance

The restart of operations marked the first step taken by WazirX under the court-approved restricting scheme. The exchange was mandated to reopen its platform, begin basic trading, and kickstart user recovery.

According to the exchange, the first distribution was completed within the first 10 business days of reopening. Eligible users received about 85% of their approved claims, with the assets valued at the reference pricing date defined under the scheme.

The payout reduced losses for most users and set the base for the next phase of recovery. The remaining portion of claims moved into a longer recovery process that was tied to asset recovery and future profits.

With this development, WazirX has now completed the next milestone. The tokens have been issued under the agreed timeline, and done in a way where the allocation matches the share of the total approved claims of each user. The exchange noted that there were no special cases and no preferences in its handling.

Recovery Tokens are visible on the Funds page in the WazirX application. According to the exchange, users cannot trade them at this stage. Nischal Shetty, founder and chief executive officer of WazirX, mentioned that the next step is for the exchange to work hard, generate enough revenue, and create profit for everyone.

Recovery Tokens represent a claim on future buybacks by the company. Buybacks will depend on profits and the recovery of illiquid assets in three months.

Plans to reimburse investors are underway

According to the exchange, WazirX will review recoveries at the end of each period. If at least $10 million in unencumbered value is realized, part of that amount will be focused on buying back Recovery Tokens. This will act as the next user distribution.

If the recoveries fall below the $10 million line in a period, the value rolls over and accumulates until the exchange meets the threshold. Recovery Token trading may be introduced later, but the exchange noted that it will remain subject to legal approval.

WazirX mentioned that if the court approves RT trading, it WOULD allow users to exit early by selling future recovery rights.

In addition to the recovery, WazirX has announced that it has ended its relationship with its previous custody provider. The exchange finalized the termination in August 2024 and has since migrated custody operations to BitGo. WazirX maintains that the attack did not target its Core infrastructure or hot wallets.

According to reports, the breach occurred through an external website used for fund management. While investigations remain ongoing, management has mentioned that full results will take time and cooperation from all parties involved.

Meanwhile, WazirX is currently on schedule with its restructuring plan as approved by the court. The company is looking forward to the future and hopes to speed up repayment as soon as possible.

The smartest crypto minds already read our newsletter. Want in? Join them.