WazirX Moratorium Approved by Singapore Court: What Now?

As a long-time crypto investor and user of WazirX, I find myself both relieved and cautiously optimistic about the recent court decision in Singapore. Having lost a significant portion of my investments due to the hack, the approval of the moratorium application is certainly a step in the right direction. The proposed 55% return of funds within the next 4-6 months gives me some hope that I may be able to recover at least part of my losses.

In the early hours of Thursday, a Singapore court granted an application for a moratorium on WazirX, subject to certain conditions. This means that for four months, the platform will be shielded from any legal actions while it implements a “restructuring plan”. The move comes in response to the massive cyber-heist that resulted in over Rs 2000 crores being stolen.

In simpler terms, WazirX users are expected to get back approximately 55% of their funds within the upcoming 4 to 6 months. This process follows a communal approach where losses are shared among all users. However, it’s important to note that there’s no promise regarding the return of the remaining 45% of each user’s funds.

A judge, Kristy Tan, who heads a judicial commission, granted an application for a moratorium filed by WazirX co-founder Nischal Shetty regarding Zettai Pte Ltd (the Singapore parent company of WazirX). Today’s news about WazirX has left many users wondering whether this is a complete victory for Nischal or if there’s still some possibility for them in the legal process.

In the court ruling, Judge Kristy Tan additionally set forth four requirements for Shetty to meet within the subsequent six weeks.

1. Publish Wallet Addresses of WazirX through court affidavit.
2. Public Book of Accounts of WazirX through court affidavit.
3. Respond to users’ queries and grievances.
4. Run a poll for seeking support of restructuring process on an independent platform.

The court has additionally instructed Mr. Shetty to deliver a written order from Judicial Commissioner Kristy Tan to all WazirX users via email. Furthermore, the exchange administration is anticipated to issue an official announcement shortly.

However, does the approval of the moratorium application by the Singapore High Court judge represent a double victory for Nischal Shetty and WazirX management? Are the 4.4 million users of WazirX left in a state of confusion about what this means for the exchange’s future? Let’s explore the possible strategies that the exchange management might consider, given the court’s approval to their moratorium application.

What’s Next for WazirX Users?

So far, Nischal Shetty has submitted four affidavits in the Singapore High Court for the moratorium request. According to the second affidavit, he made this application on August 27, which was over a month following the hacking incident on July 18. In line with the judicial procedure in Singapore, the judge has up to 30 days to either approve or deny this application.

Next steps as proposed by WazirX management after moratorium is approved:

• Step 1: Zettai (WazirX) will again move the court to seek for a meeting of all creditors to present to them the restructuring scheme and seek their approval.
• Step 2: If Court approves and gives permission, then a creditors’ meeting will be called by WazirX 21 days later. It is highly likely that the meeting will be virtual since more than 95% WazirX users are in India.
• Step 3: The creditors’ meeting will constitute a voting process, in which the criteria for restructuring scheme to pass is scoring above 50% votes and 75% or more in value of funds held by creditors.
• Step 4: If the creditors present for voting approves the restructuring scheme, then WazirX will again approach the Singapore High Court to seek their final stamp. This can take another 30 days’ time.
• Step 5: The Singapore High Court finally approves the restructuring process and 55% amount is immediately dispersed by management to each WazirX user.

As a researcher, I’ve gathered that should WazirX’s proposed course of action fail to receive approval from the creditor or the court at any point, it means that users may need to be patient while the ownership dispute between WazirX and Binance is settled.

However, users must also note that there are total 4.4 million active users of WazirX but the exchange management will consider the votes of only those present during the voting process as counted. For example, if only 1000 users attend the online voting, then WazirX needs only above 500 yes votes to get their restructuring scheme sanctioned by court.

In a decision made by the Singapore High Court, Nischal Shetty didn’t receive an outright victory, since the judge imposed four significant conditions that call for increased transparency and responsibility from the cryptocurrency exchange.

Read More

Sorry. No data so far.

2024-09-26 10:44