WazirX Restructuring Plan Approved by Singapore Court
The Singapore-based parent company of WazirX, Zettai, has taken a significant step towards recovery by presenting a financial restructuring plan to the Singapore High Court. This plan comes in response to a major incident in July 2024, when an alleged hack resulted in the loss of approximately $230 million (around Rs. 1,900 crore) for users of the cryptocurrency exchange. The court has reviewed and approved the proposal, which aims to assist affected users and restore confidence in the platform.
Court Approval and Moratorium
The Singapore High Court has granted Zettai a 16-week moratorium to implement its restructuring plan. This moratorium is crucial as it protects both Zettai and WazirX from any legal actions while they work through the restructuring process. The court’s approval indicates that there was no evidence of “abuse of process,” “misconduct,” or “wrongdoing” in the proposed plan. This decision is a relief for many users who have been anxiously awaiting a resolution to their financial losses.
During this moratorium period, Zettai will focus on executing the restructuring step-by-step. The plan is designed to extend to WazirX creditors, and for it to be implemented, at least 75 percent of these creditors must approve the proposal. If the creditors give their consent, WazirX will initiate the reimbursement process within ten business days of the scheme’s effective date. This structured approach aims to ensure that the interests of all stakeholders are considered and addressed.
Recovery Tokens and Platform Reactivation
One of the key components of the restructuring plan is the issuance of recovery tokens (RTs). These tokens will be tradable in the market, providing affected users with an opportunity to recoup some of their losses. WazirX has stated that the net profits generated over a 36-month period will be used to fund the purchase of these recovery tokens. This innovative approach aims to create a pathway for users to earn money through trading these tokens, especially during favorable market conditions.
In addition to the issuance of recovery tokens, the plan includes the strategic reactivation of the WazirX platform. This reactivation will feature new capabilities and the launch of a decentralized exchange (DEX). The introduction of a DEX is particularly noteworthy, as it aligns with the growing trend towards decentralized finance (DeFi) and could enhance the platform’s offerings. WazirX aims to regain user trust and attract new customers through these enhancements.
Upcoming Creditors’ Meeting
A creditors’ meeting is set to take place in the coming days, although the exact date has not yet been disclosed. This online meeting will be an important opportunity for Zettai to share further details about the restructuring process and to engage with creditors. WazirX co-founder Nischal Shetty has described this development as a “milestone” moment for the company. He expressed optimism about the next steps, particularly the voting process that will determine the fate of the restructuring plan.
In December 2024, Zettai warned that if creditors reject the restructuring scheme, liquidation would be the only remaining option for WazirX. This scenario could lead to a prolonged dispute with Binance, which might take three years or more to resolve. Therefore, the upcoming creditors’ meeting will be critical in deciding the future of WazirX and its ability to recover from the significant losses incurred during the hack.
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