WazirX Completes Asset Rebalancing and Restructuring Plans
WazirX, one of India’s leading cryptocurrency exchanges, has recently announced significant updates regarding its asset rebalancing process. This comes in the wake of a major hack that occurred in July 2024, which resulted in substantial losses for the platform and its users. On February 11, WazirX informed its users that they can now check their potential compensation based on their balances as of July 18, 2024. To aid in this process, the exchange has published a Preliminary Creditor List on its website, detailing the claimable amounts in US dollars. This article will explore the implications of these developments, the restructuring plan, and the new features introduced by WazirX.
Completion of Asset Rebalancing
On February 10, WazirX announced the successful completion of its asset rebalancing process. This step was crucial for aligning the token denominations with the exchange’s assets and liabilities. The rebalancing aims to provide a clearer picture of the financial standing of the platform and its users. To enhance transparency, WazirX has introduced three new tabs on its mobile app and website. These tabs allow users to view their rebalanced portfolio, check their balances as of July 18, 2024, and access the Preliminary Creditor List.
Co-founder Nischal Shetty shared updates on social media, emphasizing the importance of these changes for the WazirX community. The rebalanced portfolio will be part of the first distribution once the platform restarts. For this to happen, WazirX needs the approval of at least 75 percent of its creditors for its proposed restructuring plan. This plan was previously cleared by the Singapore High Court in January, paving the way for the next steps in the recovery process.
Proposed Restructuring Plan
WazirX is now focused on securing the necessary approvals for its restructuring plan. The exchange needs 75 percent of its creditors to vote in favor of the Scheme of Arrangement. While the exact date for the voting process has not been announced, a company spokesperson indicated that it could begin by late February or early March. This restructuring plan is critical for the exchange’s future and aims to restore confidence among its users.
The compensation scheme for creditors will involve the issuance of recovery tokens (RTs). These tokens will facilitate the distribution of recoveries through a purchase mechanism. WazirX also plans to relaunch its platform with enhanced capabilities, focusing on a decentralized exchange (DEX) model. This new approach aims to improve recovery margins for creditors through profit-sharing, the recovery of illiquid wallet assets, and strategic collaborations.
If the restructuring plan is rejected, WazirX may face liquidation, which could delay the recovery process until the end of 2030. The exchange has stated that within ten business days of the scheme’s approval, the platform will restart, subject to court timelines. This restart is crucial for the distribution of tokens, which will represent approximately 85 percent of creditors’ balances as of July 18, 2024.
Transparency and User Engagement
WazirX has taken significant steps to ensure transparency during this challenging period. The introduction of the Preliminary Creditor List and the rebalanced portfolio features on its app and website allows users to access vital information about their claims. Users can now review their claims and dispute any assigned amounts if necessary. The Claim Dispute Form is available for users to submit their disputes between February 10 and February 19.
The exchange has emphasized its commitment to accuracy and fairness in the restructuring process. An independent assessor will review submitted claims and disputes, ensuring that any necessary corrections are made. This level of transparency is essential for rebuilding trust with users who have been affected by the hack and the subsequent financial turmoil.
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