Indian cryptocurrency exchange WazirX, in collaboration with risk advocacy firm Kroll, has announced its intent to launch a decentralised exchange (DEX) and a new ‘Recovery’ crypto token to assist investors in recovering their locked assets.
WazirX’s new DEX will allow users to maintain control over their crypto assets, distinguishing it from the centralised model currently employed by most exchanges.
This shift towards decentralisation could protect users’ funds — such as hacks or service outages — that plagued WazirX earlier this year.
Interestingly, The Hindu reports that the exchange aims to position itself as India’s largest DEX within a year. However, this transformation comes with certain complexities. Decentralised exchanges typically have fewer regulatory checks, such as Know-Your-Customer (KYC) protocols, than centralised platforms.
Consequently, users should be vigilant about compliance with Indian and international crypto regulations, as DEX platforms operate with minimal intervention or oversight from the exchange operators.
When questioned about compliance, WazirX CEO Nischal Shetty clarified that WazirX will focus on providing users with technology to manage their assets while continuing to address regulatory compliance details.
To provide restitution to users, WazirX and Kroll are preparing to issue a unique ‘Recovery Token.’ This token will be airdropped to affected users’ WazirX accounts, with each token representing a portion of the funds lost in the cyberattack. According to Nischal Shetty, this token will be distributed pro-rata and will be valued at $1 per token at issuance.
WazirX clarified that while the new token will assist in delivering recoveries to impacted users, it will not function as a stablecoin — a type of crypto asset pegged to a stable reserve, like the U.S. dollar.
Instead, it will serve as a mechanism to represent outstanding debts owned to users due to the attack.
Aside from the new token, WazirX is exploring additional methods for asset recovery, including reopening the platform, potential retrieval of stolen assets, allocating profits from new ventures, liquidating illiquid assets held by third parties, and potentially bringing in fresh capital from external investors, referred to as ‘white knights.’
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