As a seasoned researcher with years of experience in the financial sector, I find myself intrigued by the situation at WazirX and Nischal Shetty’s response to the allegations leveled against him. While it is crucial to be cautious when assessing such situations, I am inclined to believe that Shetty may indeed be a victim of a “false narrative.” The pressure on management to return user funds following the cyberattack is immense, and it seems that they are taking steps to address this issue in a transparent and legal manner.
Nischal Shetty, one of the co-founders of cryptocurrency exchange WazirX, has openly responded to accusations linking him to the notorious stockbroker swindler Harshad Mehta. He asserts that he is instead a target of a “misleading narrative.” Recently, on his social media platform (previously known as Twitter), Shetty asked for the backing of users in support of his reorganization plan, which comes about five months after WazirX suffered a cyber attack leading to the theft of approximately 20 billion rupees worth of user assets.
In response to a user comparing him to Harshad Mehta, a notorious stockbroker from the 90’s accused of fraud and market manipulation, Nischal acknowledged the allegations but emphasized his ongoing efforts to resolve the current issue. Meanwhile, millions of WazirX users are eagerly waiting for access to their frozen funds.
Scams and cyber-attacks are distinct issues, so beware of misleading stories that may seem appealing but aren’t accurate. This recent cyber-attack has caused distress for everyone, and our goal is to clean up the mess and work towards a solution as effectively as possible. However, this can only be achieved…
— Nischal (Shardeum) (@NischalShetty) December 7, 2024
Nischal cautioned Twitter users about trusting overly simplified but incorrect narratives regarding the WazirX exchange. Given the current cryptocurrency market surge, the WazirX administration is experiencing significant stress to release the frozen and locked user funds that have been inaccessible for approximately 4.5 months. Following the July 18 hack, WazirX users suffered a loss of around 45% of their assets. In response, the management put forth a restructuring plan before the Singapore Court, where users are anticipated to accept a shared-loss policy on their cryptocurrencies as part of the proposed scheme.
As a researcher involved in this project, I can share that our restructuring strategy is designed to repay user funds once normal operations resume. Following the advice of Shetty, we’ve decided to postpone withdrawals until after the restructuring process is complete. This approach will help us avoid potential delays and ensure a smoother transition by allowing our team to concentrate fully on the restructuring efforts without interruptions from deposit or withdrawal transactions.
Once funds have been withdrawn following the hack, the team must halt their restructuring initiatives. To avoid any further delays, we’ll carry out this withdrawal only after the restructuring work is finished. Generally, these withdrawals will coincide with the platform restart if the scheme gets approved.
— Nischal (Shardeum) (@NischalShetty) December 7, 2024
Additionally, Shetty highlighted that the leftover funds are currently subject to legal examination. In other words, those funds remain frozen in the bank while we continue our legal efforts to resolve the matter. The restructuring proceedings continued on Friday as WazirX submitted a court affidavit in Singapore. Nischal Shetty mentioned that they have submitted an application for permission to convene a meeting of creditors, which is a significant step forward in moving ahead with the proposed resolution plan.
Yesterday, we submitted a request to the Singapore court for a meeting of creditors to be held. This is an essential action in progressing with our plan. By doing so, we’re moving one step closer to presenting our proposal for voting.
Next week, we look forward to sending you the details of our plan in the form of scheme documents.
— Nischal (Shardeum) (@NischalShetty) December 7, 2024
Over the next fortnight, I find myself and millions of fellow WazirX users bracing for a significant moment. The Singapore court is poised to reveal the results of the user vote that will decide whether our exchange’s restructuring plan gets approved. This outcome isn’t just crucial for the WazirX management; it holds equally weighty implications for us, its devoted user base.
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2024-12-07 10:13