Nischal Shetty
After almost 15 months, crypto exchange WazirX restarted its operations from October 24. A cyberattack on the exchange in July last year resulted in the theft of about Rs 2,000 crore worth of funds. The crypto exchange, which had over 15 million users, is now trying to rebuild users' confidence and enhance security. In an interaction with Uma Kannan, WazirX founder Nischal Shetty said after this attack, they learned the need to go with a top-class custody provider who can withstand such attacks. Edited excerpts:
1) What kind of response or feedback that you have received from your existing users, and is there any panic selling?
The response has been really positive, and we were surprised to see the enthusiasm that people have in also using the platform. Because before that something like this has never happened - where an exchange gets attacked at this magnitude and then comes back. It’s not like there’s any playbook out there for a business — and not just an exchange — any business anywhere in the world. We did not know what to expect, and we were cautious. But, once we started, the response has been very positive in terms of people actually trading. People are also coming to buy, and we are also seeing a lot of positive comments about the restart. The most important aspect was how do we make sure that as we restart, there’s no panic selling. But we knew that the platform was not operational for 15 months, and there would be people who would have wanted to sell their assets for whatever reason. Different needs exist, and people will be selling. If you look at crypto exchanges in general, when there is some fear in the market, suddenly there is selling pressure, and then the prices drop below what they are otherwise globally. That’s when panic selling happens — you sell, everyone sells, and the prices are not optimal. So, we wanted to account for that. And what we did was we restarted in phases.
The other thing that we did was before the restart, we started a campaign to educate people on what to do when the restart happens. Our objective was to tell everyone not to panic sell. Our only thing was — you can do what you want, but make sure you’re not panic selling because that will impact the prices, and then you will not get a good price. The other thing is — check the price internationally and then trade. And that helped a lot because we saw that people made informed decisions. We told them there’s no need to rush because we are restarting. It’s not like you have a window of one day to sell and exit or something. We are going to be restarting; we are going to be operating normally, so you have time. And I think that helped a lot. People understood that, and that’s why we did not see a lot of panic selling.
2) What is the percentage of exit? How many users are there at present?
It’s been only a few days now and we have been focused on restarting the platform. We’ve actually not gone into the details of numbers. Our objective was — how do we make the platform operational so that whatever you want to do — whether you want to trade, deposit, or withdraw — you should be able to do that without any issues on the platform. And that’s why we have consciously not looked at these numbers. We reported Rs 40–50 crore worth of trading volume in the last 24 hours (on Oct 28). It’s been the same the last few days, and it’s been growing. From the second or the third day (Oct 25 or 26), we started seeing Rs 40–50 crore range of trading volume in a 24-hour period. We’ve also started seeing enough liquidity where if you want to sell, you’re going to get a price which is almost on par — it’s still reaching that equilibrium where it’s on par with everyone else. The people who are on the platform, everyone initially is going to use the platform for whatever reason. So, it will not be right for us to judge the metric right now because even if you’re selling, you’ll be tagged as a customer, and even if you’re buying, you’re a customer. What we are thinking is — maybe after a few weeks, then we can see who are the ones who are actively trading.
3) You are saying that no exchange has seen such a huge Rs 2,000 crore attack. What was your learning experience?
There’s been a ton of learning in this whole 15-month journey, right from the beginning where we did not even know what’s the right direction. But we acted quickly. For example, when the theft happened, we quickly employed the help of the right agencies to trace the stolen assets, which led to about $3 million worth of assets being frozen immediately. Though it’s a small amount, in a case like this, it’s very hard to recover anything because there’s a state actor involved — North Korean hackers were involved. So, it’s hard, but because of the swift decision-making back then to employ the services of the right people, we were able to get some recovery. We knew liquidation was the default route, but that would have led to several years of delays and low returns. We decided to look for a solution — restructuring. With restructuring, you could restart and recover. Our motivation was: how do we make sure that users can get back their value? That could be done in two phases — one, distribute what exists; two, generate value going forward. We distributed around 85% of the value during the restart. For the remaining 15%, we’ve baked into the scheme a three-year plan — we’ll work hard to generate profits and recover stolen assets, and distribute those back to users.
4)The crypto ecosystem as such has gone through many changes in the last 15 months. Are you seeing any change among your users and whether crypto awareness has increased among people?
A lot more people are aware of crypto right now. There’s a lot more enthusiasm compared to before, and it’s a constant thing with crypto. Every year, the number of people who know about crypto increases, the number of people who are getting into crypto is increasing. The enthusiasm is always there. It’s growing, but it’s at a global level. At an India level, there is still a lot of work to be done. The kind of enthusiasm that the last 15 months have seen globally, I think in India it’s not the same. And the reason is because, India has not gone beyond crypto exchanges. Everyone is focused on exchanges. We are not talking about really building —you can’t easily name a startup from India which is building for Web3 or for decentralised applications. Everyone in India, all the Indian customers, are trying to use all these Web3 products that are built by the West for the West, and they’re somehow accommodating. An entire ecosystem needs to be built in India which focuses on decentralised applications — where Indian developers, Indian startups, and Indian entrepreneurs are emerging and building for that. That’s something that has happened in the West, in Southeast Asia, and in Europe also. Unfortunately, in India the ecosystem has not taken off, and someone has to work towards it. We want to work towards that. As an exchange, we also want to help promote Indian products that are built for the Indian audience around Web3. That’s one of the objectives, and everyone should do that.
5) As far as Web3 is concerned, what is your plan going forward?
Right now, we are trying to set up our things back on track. But after that, the idea is that we want to look at working with various Web3 entrepreneurs to help support them in whatever way we can. We will still have to ideate on that. But that motivation is there — that we need to participate in Web3 creation and the Web3 ecosystem. We will have to now figure out as we restart and as we start interacting with the ecosystem.
6) Do you have any plans to increase trust or bring in new users from now on?
We definitely have to work towards that. Our objective is — how do we now ensure that the ones who are happy get happier, and the ones who are upset and angry, how do we ensure that they become more cooperative. It will not be like one magic solution — you cannot just simply announce something and fix everything. It will be a series of things that we will have to do over the next several months, maybe a year or two. But the good thing is, we don’t give up. We will do whatever our customers want us to do that helps them. For example, after this attack, we learned that we need to go with a top-class custody provider that can withstand such attacks. That’s why we went with BitGo, which has $90 billion worth of assets, so our $300–400 million is a small portion of that pool. Now they are going to take care of it. They have insurance worth $250 million and are a US entity — a multi-billion-dollar company. We have chosen BitGo for the majority of our funds so that they stay secure there.
While we focus on our trading experience, we want to make sure we give the best trading experience because that’s what we are — a trading platform where you can come and trade. People have been seeing these changes and are liking them.
7) How do you want to build that brand again in 2026? What is your plan for the next one year?
One year from now, when we look back, I want to be able to ensure that we have created more value. When we were restructuring, the objective was that we should be able to look back and say, 'Look, despite the difficulties, we made sure that we did the right thing and restarted.' And we’ve done that. Now, when we look back after, say, a year from now, I want us to be able to say that we also worked hard to create more value — not just the 85%. We worked hard on creating more value for our customers; we also gave them the best trading experience. We want to be one of the top exchanges again — number one in whatever metrics are out there. That’s the objective right now — rebuild. We have this 'RRR' strategy internally — Restructure, Restart, and Rebuild. We’ve done the restructuring, we’ve restarted, and now we are in the rebuilding phase.