WazirX exchange management has found itself in troubled waters yet again as they announced allocation of a whopping Rs 250 crores of user funds as “cost reserves”, required for running the exchange as well as launching an all together new decentralized exchange (DEX) in 2025.
The WazirX management has claimed that this Rs 250 crore cost reserve fund actually consists of Rs 100 crores initially taken from users in September this year, in the name of legal, investigation as well as restructuring fees, which was then invested as tokens to strategically raise another Rs 150 crore in the ongoing bull run.
However, aggrieved users were quick to point out that even the initial Rs 100 crores and later on, the realized additional Rs 150 crores, are user funds that the exchange management is using for its own interests, without taking their consent.
The exchange insists that no user funds were used to generate the surplus. Yet, users claim otherwise, arguing that these funds belong to them and were repurposed without consent. On Twitter, a user highlighted the core issue, tweeting, “Who gives you permission to use our funds for legal/software development? This shows the mindset of yours; you are taking our funds like company partners.”
The controversy deepened as experts questioned the necessity of ₹250 crores for building a DEX, which they estimate would cost only ₹10 crores. Critics accuse WazirX of inflating costs to mask ulterior motives. One user even called for legal action, urging authorities to extradite WazirX founder Nischal Shetty from Dubai or Singapore to face trial in India.
Meanwhile, WazirX management has claimed that they needed Rs 250 crores as cost reserve fund which will be spent in the next three years.
“An additional USD18m (Rs 150 crore) is needed to fund the restructuring, which is expected to take place over 36 months. Key uses of the Cost Reserves include the reactivation of the WazirX platform, the commencement of a New Business (DEX), provide funding while the business recovers, and to pursue Illiquid and Stolen Assets all of which is to the benefit of creditors,” read an official statement from WazirX management.
Also Read: Where Did WazirX Get the $150 Crore for Restructuring Expenses?
