As a seasoned researcher with years of experience in the dynamic world of cryptocurrency exchanges and digital assets, I find myself closely following the developments at WazirX. The recent turn of events has been nothing short of extraordinary, and the moratorium application filed by Zettai Pte Ltd (WazirX) at the Singapore High Court is a significant step towards finding a resolution for users impacted by the hack that occurred on July 18, 2024.
WazirX cryptocurrency exchange has initiated a moratorium request at the Singapore High Court, asking for a six-month stay on any legal actions against them. This pause is requested until they can present a restructuring plan to compensate users in India, following the hack. The court hearing for this application, represented by Raja and Tann Singapore LLP, is currently ongoing at 12 PM IST in the Supreme Court chamber of Singapore High Court, with Judge Assistant Registrar Jacqueline Lee presiding over the proceedings.
1. The court hearing will be a streamlined event, open only to registered WazirX users who can access it via a Zoom link. On the other hand, WazirX co-founder Nischal Shetty conducted a Townhall meeting on Monday, which was broadcasted live on YouTube, during which he clarified the reasons behind their moratorium request to the users.
On July 18, 2024, a severe cyberattack struck WazirX, a well-known Indian cryptocurrency exchange. The assault focused on one of its ERC-20 multisignatory cold wallets, leading to the loss of approximately $234 million (approximately ₹2000 Crore) in digital assets.
As a result of this incident, all crypto and INR withdrawal processes were temporarily stopped, which we referred to as the “Withdrawal Pause.” Additionally, trading activities were halted, or what we called the “Trading Pause.” These measures aimed to restore stability and evaluate the extent of the impact.
WazirX Moratorium Explained
To handle these obstacles and manage user balances effectively, WazirX has opted for a reorganization strategy under a Scheme of Arrangement in Singapore. This reorganization aims to divide any remaining cryptocurrency assets among users equally, prioritizing fair distribution and increased token values. Key aspects of this reorganization process include:
As an analyst, I’m tasked with seeking potential investors or strategic partners for our platform. Our goal is to secure resources that will aid in our revitalization process and ultimately boost the value of our tokens.
2. Profit-Sharing Offerings: Creating and launching new items that enable profit-sharing and user collaboration for financial gain.
3. Asset Recovery: Continuing efforts to trace and recover stolen crypto assets.
4. WazirX has disclosed that it’s using Rs 100 crore from users’ funds to cover the costs associated with its ongoing legal proceedings due to the imposed moratorium, which is a temporary restriction on certain activities.
Explaining the restructuring process
As a crypto investor, I want to clarify that the restructuring process, which will likely last at least six months, should not be mistaken for insolvency, liquidation, or bankruptcy. Instead, it signifies a well-planned approach to address financial difficulties and offer users a feasible roadmap towards recovery.
With this proposal, users would essentially be considered as unsecured creditors with a right to the platform’s assets. However, their potential recovery depends on the resolution of any ongoing legal disagreements.
In order to make this reorganization possible, WazirX has requested a temporary halt from the Singapore High Court. This request initiated an automatic 30-day suspension on August 27, 2024, providing WazirX with the required timeframe to construct a thorough restructuring plan.
The temporary halt (moratorium) is essential as it provides the platform with a reprieve from instant lawsuits and regulatory actions, allowing it time to devise a solution. A court hearing regarding the prolongation of this moratorium has been scheduled for September 26, 2024.
INR Withdrawals and User Support
Despite ongoing attempts to address crypto-related matters, WazirX successfully resumed Indian Rupee (INR) withdrawals on August 26, 2024. Users can currently withdraw up to one-third of their INR holdings until September 8, 2024. Starting from September 3, 2024, users will regain access to an additional one-third of their INR balances, offering temporary liquidity as the platform works through its crypto challenges.
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2024-09-03 09:56