WazirX’s Moratorium Appeal Gets Four Months' Time from Singapore Court, Here’s What it Means

WazirX has partnered with financial advisory firm Kroll in Singapore to support its restructuring efforts.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 26 September 2024 15:50 IST

WazirX’s Moratorium Appeal Gets Four Months' Time from Singapore Court, Here’s What it Means

Photo Credit: Facebook/ WazirX

One of WazirX’s multi-sig wallets was hacked for over $230 million on July 18

Highlights

WazirX is looking at a six months' timeline for financial restructuring
WazirX users are criticising the exchange for delaying compensations
Crypto withdrawals remain suspended on WazirX

WazirX, the Indian crypto exchange that suffered a $230 million hack in July, is actively working to restructure its finances and compensate affected users. In a recent development, a Singapore court has granted the exchange a four-month moratorium to finalize its financial restructuring. In a press release on Thursday, September 26, WazirX stated that this move lays the groundwork for a legally binding resolution to restore users' crypto balances.

In August, Zettai, the Singapore-based majority stakeholder in WazirX, filed a moratorium request with a Singapore court. A moratorium grants struggling companies a court-sanctioned grace period to devise their recovery plan. While WazirX initially indicated that it would require six months to restructure its finances, the court has only granted a four-month period. It remains uncertain whether this timeline will be extended to accommodate WazirX's original estimate.

In the press note obtained by Gadgets360, the exchange claimed that the Singapore court has acknowledged WazirX's active engagement with creditors and promptness in filing for this moratorium.

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“As part of the court's conditions, WazirX will make wallet addresses public via a court affidavit, respond to user queries raised in the courtroom, release financial information, and ensure future voting for court applications is scrutinised by independent parties,” the note said.

In Singapore, WazirX has partnered with financial advisory firm Kroll to support its restructuring efforts. The exchange stated that it is collaborating with its advisors and stakeholders to develop a comprehensive plan that addresses the needs of all involved parties.

Amid intense criticism and social media backlash, WazirX co-founder and Zettai director Nischal Shetty expressed gratitude to the Singapore court for its latest ruling.

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As of September 13, only 441 or 0.02 percent out of its registered user base of 16 million had agreed to WazirX's restructuring plan via emails.

On July 18, a multi-signature wallet associated with WazirX and managed by Liminal Custody was hacked, leading to a loss of over $230 million (approximately Rs. 1,900 crore) and leaving users in distress. As a result, crypto withdrawals on the platform have been suspended since the incident. Currently, 34 percent of users' INR funds remain frozen while the investigation is ongoing, but the remaining 66 percent of INR funds are available for withdrawal by users.

Meanwhile, reports have surfaced of the unidentified WazirX hacker laundering the stolen funds through software like Tornado Cash, which complicates any potential negotiations for recovering the stolen assets.

According to the WazirX team, the timeline for the company's financial restructuring will remain in effect unless a "white knight" investor steps in to provide a capital infusion.

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Further reading: Cryptocurrency, WazirX, Hack, Zettai, Nischal Shetty, Singapore, Moratorium

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More