WazirX CoC Backfires: Only 4 out of 10 Members Present in 1st Meeting

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As a seasoned crypto investor with over a decade of experience navigating the volatile digital currency landscape, I must say the recent developments at WazirX have left me feeling somewhat uneasy and skeptical. The idea of an anonymous 10-member committee representing 4.4 million users in such critical matters seems more like a gamble than a well-thought-out strategy to me.

The proposed strategy by WazirX exchange leaders to establish a clandestine committee of ten creditors (CoC), representing their 4.4 million users, has faced criticism as only four members attended its inaugural online meeting, with some expressing discomfort about representing all the users. The role of this CoC is significant in obtaining approval for WazirX’s funds redistribution plan from the Singapore Court following the Rs 2000 crore hack incident.

Last Friday, WazirX’s management shared the minutes from a virtual meeting held on October 15 between their team, Kroll legal firm, and some members of the CoC (Council of Community). The meeting was attended by just four unidentified CoC members, as per WazirX. During this meeting, a few participants voiced their discomfort in representing the platform’s 4.4 million users because they felt it wasn’t entirely accurate to speak for everyone.

As an analyst, I’m sharing that although the Code of Conduct (CoC) proposals made by CoC to WazirX are voluntary, the company’s leadership intends to present this CoC in a Singapore court as part of their commitment to transparency. This move is aimed at securing approval for their redistribution scheme. It’s important to note that WazirX generated this anonymized Code of Conduct from a selected pool of 43,000 users, drawn randomly from their total user base of 4.4 million.

As reported by WazirX leadership, the identities of Committee of Coin (CoC) members have been kept confidential due to security concerns since they did not allow for user nominations to fill these roles. This decision prompted a wave of criticism from various users and influencers who voiced concerns about the lack of transparency. Furthermore, many users raised doubts as to whether the 10 randomly selected members would possess the necessary technical expertise to adequately represent the interests of over 4 million users.

According to WazirX officials, the four individuals present at the gathering put forth numerous suggestions, and when the meeting concluded, there was general agreement on certain key points among all parties involved.

Due to a 45% shortage of assets following the cyber-attack on July 18, WazirX is working on a restructuring plan in Singapore. This plan, known as a Scheme of Arrangement, has been granted a four-month extension by the Singapore Court, running until January 26, 2025. During this time, WazirX aims to resolve the asset deficit and find methods to enhance user recoveries.

WazirX presents the COC (Creditors’ Committee) as a means to gather opinions from unsecured creditors and develop a balanced restructuring strategy. Nevertheless, some users remain skeptical. The members of the COC serve as a listening post for creditor concerns but do not possess the authority to mandate their suggestions since they only offer advisory input without voting rights to enforce their proposals.

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2024-10-30 15:00