CoinSwitch moves to acquire WazirX users offering Rs 600 cr in recovery aid

Industry: Other 2 weeks ago

Home-grown crypto exchange CoinSwitch is rolling out a recovery programme worth Rs 600 crore targeted at WazirX users as the company looks to acquire customers of the embattled firm and enable them to recoup their losses.

The amount involved in the programme will be rolled out to WazirX users in a staggered manner over a two-year period. The programme will enable CoinSwitch to disburse amounts at a fixed frequency to such users in Indian rupees (INR) and crypto equivalents.

“The amount is in INR or crypto deposited from CoinSwitch directly into a user’s account with no lock-in. They will get it into their wallet with which they can deposit it back to their bank accounts, sell it, or trade. Once WazirX opens crypto withdrawals, the programme will disburse based on those crypto deposits,” said Ashish Singhal, co-founder, CoinSwitch, in an interaction with Business Standard.

The announcement comes as the crypto industry rides a surge in virtual digital asset (VDA) prices, including Bitcoin. The price of the cryptocurrency reached an all-time high of $108,319 last month.CoinSwitch is funding the program from 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 programme directly from our pockets,” Singhal added.

The company has raised over $300 million in funding to date from investors such as Andreessen Horowitz (a16z), Tiger Global, Peak XV Partners (formerly Sequoia Capital India), Ribbit Capital, Paradigm, and Coinbase Ventures.

At present, CoinSwitch has a base of over 20 million users. The programme aims to target about 4 million users of the WazirX platform.

The company will screen affected WazirX users using their balance statements. It plans to calculate the user losses and distribute funds based on the inputs.

“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 (AUM), and calculate rewards on top of it,” Singhal explained.

In one of its disclosures, WazirX said that around 87 per cent of its users represented less than 8 per cent of total claims on the platform. The crypto exchange faced a security breach in July last year, which led to a loss of over $230 million.

Eligible users can earn up to 10 per cent of the funds deposited on the platform in two years as an upfront sign-up reward. Customers can earn up to 5 per cent of the deposited funds through their referral of other affected WazirX users.

The company added that it will further pool trading revenue generated from this programme and distribute it to the affected users in proportion to their losses.

Source: Business-Standard

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