A month after India’s biggest crypto hack, WazirX filed a moratorium application with the Singapore court through its Singapore-based entity, Zettai Pte Ltd.
Reasons for Filing the Moratorium
According to WazirX owners, the move is intended to provide time for restructuring due to a cyberattack that occurred on July 18, 2024. The announcement has raised concerns within the Indian crypto community regarding the potential bankruptcy route WazirX might take to recover user funds.
Consequences for Users
The moratorium application is intended to provide Zettai time and legal protection to develop a restructuring plan through a Scheme of Arrangement. This seeks to pause legal actions from creditors, giving Zettai time to develop and propose the restructuring plan. The official announcement states that users affected by the WazirX hack could receive a pro-rata distribution of available crypto assets, possibly taking at least six months. Additionally, ongoing disputes between Zettai and Binance regarding the ownership of WazirX further complicate the resolution process. A town hall meeting to explain the moratorium and restructuring process is scheduled for the week commencing September 2, 2024, during which WazirX plans to resume phased INR withdrawals, initially making 66% of the INR balances available.
Conclusion
This time-sensitive announcement comes shortly after CoinSwitch, another leading crypto exchange, threatened WazirX with legal action to reclaim 80 crore INR locked in the exchange. Users of WazirX are left to watch the legal proceedings unfold.
WazirX users face uncertainty following the moratorium application, awaiting court decisions and the company's next steps.
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