WazirX crypto exchange, through its parent company Zettai, is approaching the Singapore High Court on September 3 to seek a moratorium application. This move aims to temporarily halt legal actions against the exchange while it develops a compensation plan for its users in India.
WazirX Moratorium Application
A moratorium application typically requests a temporary suspension or delay of certain activities, such as loan payments, debt collection, or legal proceedings. In WazirX's case, the moratorium seeks to provide the company with time to stabilize its operations following a massive cyberattack on July 18 which led to the loss of 45% of user funds, amounting to $234 million (around ₹2000 Crore). Zettai's application to the Singapore High Court aims to provide the much-needed breathing space to allow WazirX to restructure and explore possible avenues for recourse for affected users.
Virtual Townhall on September 2
Ahead of the court hearing, WazirX has organized a virtual townhall today at 1:30 PM IST to address the restructuring plan and the moratorium application with its users. The townhall is expected to provide clarity on the recovery steps WazirX is taking post the cyberattack and its compensation plan for the affected users.
User Expectations
Users are demanding transparency and accountability from WazirX. They are particularly interested in understanding how the remaining funds will be managed and whether any future gains in crypto value will be considered in the compensation plan. There is also a strong push for WazirX to reveal more information about its financial dealings, particularly those related to the hack and subsequent legal proceedings. Recently, WazirX admitted to a mistake in reporting user balances, initially stating a total of $570 million, which was later corrected to $546 million. Users expect detailed explanations about this discrepancy and how it impacts their claims. Additionally, users are concerned about the ₹100 crore ($12 million) deduction for legal expenses from their funds. They seek justification for this deduction and why the WazirX team hasn't contributed.
WazirX finds itself in a challenging situation and is taking measures to regain user trust and compensate for losses. The moratorium application to the Singapore court and the virtual townhall with users are crucial steps in this process.
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