Singapore High Court Rejects WazirX Restructuring Plan

WazirX users who lost funds in a significant $230 million hack last year may face further delays in receiving reimbursements. The High Court of Singapore recently rejected the crypto exchange’s restructuring plan, which had previously gained approval from a majority of its creditors. WazirX expressed disappointment over the court’s decision and is now exploring legal options to appeal, aiming to expedite the distribution of funds to affected users.

High Court’s Decision on Restructuring Plan

The Singapore High Court’s ruling against WazirX’s proposed restructuring scheme has raised concerns among its users. The exchange had sought court approval to implement a plan that was backed by 93 percent of its creditors, with 131,659 out of 141,476 participating in the voting process. Despite this overwhelming support, the court declined to approve the plan, leaving WazirX in a precarious position. The exchange had previously moved to the court for a moratorium after a multi-signature wallet was allegedly hacked, resulting in substantial losses for its users.

WazirX’s restructuring scheme was designed in collaboration with Kroll, a financial restructuring firm, to outline a roadmap for reimbursements. The court had initially allowed the firm to approach creditors in January, but the recent decision has complicated the situation further. WazirX is now tasked with navigating the legal landscape to find a way forward for its users who are awaiting their funds.

WazirX’s Response and Future Plans

In light of the court’s ruling, WazirX has expressed its commitment to resolving the situation. The exchange stated that it did not foresee this outcome and remains focused on initiating distributions to affected users as soon as possible. WazirX is currently consulting with its legal and advisory teams to evaluate all available options, including an appeal against the High Court’s decision. The exchange emphasized its dedication to complying with all legal and regulatory processes while working towards a solution.

In a recent update on X (formerly Twitter), WazirX reassured users that the decision does not impact the net liquid platform assets, which remain secure. The exchange has promised to provide further updates as the situation develops, indicating that it is actively seeking ways to address the concerns of its users.

Background of the Hack and Its Aftermath

The hack that led to the loss of $230 million from WazirX occurred last year, when one of its multi-signature wallets under Liminal Custody was compromised. This incident prompted the exchange to seek legal protection and develop a restructuring plan to manage the fallout. Zettai, the entity that holds a majority stake in WazirX and is registered in Singapore, has been at the forefront of these efforts.

Following the court’s initial review of the restructuring scheme in January, WazirX was granted the opportunity to engage with its creditors. However, the recent rejection of the plan has left many users uncertain about the timeline for reimbursements. The court had previously extended the moratorium on legal actions against WazirX until June 6, but it remains unclear whether the exchange will seek another extension to protect itself from new legal challenges.

Implications for Users and the Crypto Market

The rejection of WazirX’s restructuring plan has significant implications for its users, many of whom are anxiously awaiting the return of their funds. The uncertainty surrounding the reimbursement process could impact user trust and confidence in the exchange. As WazirX navigates this challenging situation, it is crucial for the firm to communicate transparently with its users and provide timely updates on any developments.

The broader crypto market may also feel the effects of this situation, as regulatory scrutiny and legal challenges continue to shape the landscape for exchanges and users alike. WazirX’s experience serves as a reminder of the risks associated with cryptocurrency investments and the importance of robust security measures. As the exchange works to resolve these issues, the outcome will be closely watched by both users and industry stakeholders.

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