WazirX Reimbursement Plan Delayed by Singapore Court Ruling
WazirX, the cryptocurrency exchange, has recently wrapped up a customer voting process regarding its restructuring plan aimed at compensating users impacted by a significant hack in July 2024. Following a favorable vote from the majority of creditors, the exchange has approached the Singapore High Court for final approval to initiate the reimbursement process. However, the court has postponed the case, instructing WazirX and its parent company, Zettai, to complete additional documentation before proceeding.
Customer Voting and Court Proceedings
WazirX announced that a substantial 93 percent of its creditors supported the proposed restructuring scheme during the recent voting process. This initiative is designed to address the claims of over 141,000 creditors, who collectively hold claims exceeding $195 million (approximately ₹1,673 crore). The restructuring plan includes the issuance of tradeable recovery tokens (RTs) and a mechanism for distributing recoveries through the purchase of these tokens. Despite the positive outcome of the vote, the Singapore High Court has deferred the case to a later date, requiring WazirX and Zettai to finalize certain documentation before any reimbursement can begin.
The court’s decision to extend the moratorium cover for WazirX and Zettai until June 6 allows the companies to postpone payments to creditors while safeguarding them against new legal actions. This moratorium was initially requested by Zettai in August 2024, starting as a thirty-day request but has now been extended for several months. The court’s involvement highlights the complexities involved in the restructuring process and the need for thorough legal compliance.
Creditors’ Reactions and Concerns
Following the announcement of the court’s decision, WazirX took to social media platform X (formerly Twitter) to update its users. However, the response from creditors was overwhelmingly critical, with many expressing frustration over the delays and the need for court approval to process refunds. One user questioned the necessity of court permission for refunds, suggesting that the exchange should directly return the funds to affected users. The criticism reflects the growing impatience among creditors who are eager to see their claims addressed.
WazirX has reassured its users that it is committed to executing the restructuring plan effectively. The exchange emphasized its dedication to resolving the situation and facilitating the distribution of recovery tokens as soon as it receives the necessary court sanction. However, creditors will need to remain patient until the court reconvenes on June 6 for further developments.
The Hack Incident and Its Aftermath
The restructuring efforts come in the wake of a significant security breach that occurred on July 18, 2024, when a WazirX multi-signature wallet was compromised, resulting in a loss of approximately $230 million (around ₹1,900 crore). The exchange attributed the hack to North Korean hackers, based on investigative reports. Despite launching a white hat bounty initiative to recover the stolen funds, WazirX has yet to trace the missing assets.
The hack has had a profound impact on WazirX and its users, leading to the current restructuring efforts. The exchange’s commitment to compensating affected users through the proposed recovery tokens is a crucial step in rebuilding trust and ensuring that creditors receive some form of restitution. As the situation unfolds, all eyes will be on the Singapore High Court’s next steps and the potential for creditors to finally receive their due compensation.
Looking Ahead
As WazirX navigates the complexities of its restructuring plan, the upcoming court date on June 6 will be pivotal for the exchange and its creditors. The outcome will determine the timeline for the distribution of recovery tokens and the overall resolution of claims. With a significant number of creditors awaiting compensation, the pressure is mounting on WazirX to deliver on its promises and restore confidence among its user base. The exchange’s ability to effectively manage this situation will be crucial for its future operations and reputation in the competitive cryptocurrency market.
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