Following a serious security breach affecting its users, Indian cryptocurrency exchange WazirX has revealed plans to start an independent decentralized exchange (DEX). Founder Nischal Shetty remarked that this strategy shift toward decentralization is part of WazirX’s overall recovery and security makeover. The new DEX attempts to address counterparty risk and provide users with complete sovereignty over their assets, allowing them to handle their finances autonomously without relying on a central authority.
The effort to decentralize follows a July 2024 incident in which attackers allegedly stole around $235 million from WazirX’s multi-signature wallets. Following the hack, WazirX attracted widespread criticism for implementing a temporary solution that restricted users’ access to their assets, which many consumers saw as an attempt to “socialize losses.” However, the platform has since overturned these limits, returning all account balances.
WazirX has also announced intentions to launch a specific token for the DEX, which will facilitate fee payments and empower users with governance powers, allowing them to participate in the platform’s development and management choices.
In addition to launching the new DEX, WazirX has initiated trading on its existing platform and initiated a comprehensive recovery plan. Under a Singapore-based scheme of arrangement, WazirX will sanction this operation and provide recovery tokens to affected users, expanding their liquidity options. WazirX reports that they will release $284 million in liquid assets to assist in recovering lost funds, and then transfer tokenized assets into customers’ accounts to compensate for any remaining losses.
As WazirX moves forward with its restructuring, it continues to collaborate with regulatory authorities to settle outstanding inquiries related to the incident. The exchange is making a significant effort to regain customer trust and reestablish its reputation in the bitcoin sector through its recovery approach and development of a decentralized platform. The new decentralized exchange and staking services will provide customers with more safe and diverse trading choices, allowing them to maintain ownership of their assets in a decentralized environment.
