Indian cryptocurrency exchange CoinSwitch seeks to acquire customers from the hacked competitor exchange WazirX by offering a recovery fund to WazirX hack victims.
CoinSwitch took to X on Jan. 7 to officially announce the launch of a WazirX hack recovery fund of 600 crore Indian rupees ($69.9 million).
“CoinSwitch Cares,” the company’s recovery fund, aims to help WazirX users who lost money due to an alleged cyberattack in July 2024.
As part of the program, CoinSwitch will distribute the funds to the affected users within two years, aiming to boost the Indian crypto ecosystem.
WazirX loss statements are required
According to official data from CoinSwitch Cares, any user affected by the WazirX alleged security breach can claim funds through the program.
“Eligibility requires users to provide proof of their losses in the form of WazirX loss statements,” CoinSwitch said in its FAQ section.
“You must provide your WazirX loss statements and any other proofs that CoinSwitch may, at its discretion, demand from time to time to verify your claim of having suffered a loss,” the FAQ section added.
CoinSwitch Cares’ recovery process. Source: CoinSwitch
Under the program, CoinSwitch will offer three types of rewards: sign-up bonuses, revenue sharing and referral bonuses.
While users can sell their crypto and withdraw in rupees, direct crypto withdrawals are currently not supported, CoinSwitch noted.
CoinSwitch will fund the program from its cash reserves
According to a report by the local news agency Business Standard, CoinSwitch will fund the two-year recovery program using its cash balances.
“We have about five years of runway from where we sit. The current Bull Run has only helped us get even more value into the ecosystem. We are funding this program directly from our pockets,” CoinSwitch co-founder Ashish Singhal said.
An excerpt from CoinSwitch Care announcement on X. Source: CoinSwitch
To calculate user losses and distribute funds, CoinSwitch plans to screen affected WazirX users using their balance statements.
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“Once WazirX opens crypto withdrawals, it will become easy to track the user claims that customers bring to our platform. We will know the assets under management and calculate rewards on top of it,” Singhal said.
CoinSwitch targets four million WazirX users
Founded in 2017, CoinSwitch is one of the biggest crypto exchanges in India, with 20 million registered users.
The company is known for securing hundreds of millions of dollars in funding from major industry investors, including Andreessen Horowitz, Tiger Global, Coinbase Ventures, Peak XV Partners (formerly Sequoia Capital India) and others.
CoinSwitch’s support program aims to target about four million users of the WazirX platform.
The news comes a few months after WazirX suspended withdrawals after encountering an alleged $235 million hack in July 2024.
The breach has fueled some controversy in the crypto community, with WazirX’s custody provider, Liminal, blaming the exchange for allegedly using compromised devices.
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