Singapore Court Grants WazirX 4-Month Time to Sort Restructuring Plan

Coinspeaker
Singapore Court Grants WazirX 4-Month Time to Sort Restructuring Plan

A Singapore court has reportedly granted Indian cryptocurrency exchange WazirX a four-month moratorium, following the exchange’s plea for relief after July’s $234 million hack. The ruling, announced on September 25, includes several conditions that the exchange must meet, giving WazirX some breathing room to restructure and work towards compensating affected users.

Under the court’s conditions, WazirX is required to disclose the addresses of its wallet holdings through an affidavit and respond to users’ queries. Additionally, the exchange must reveal its full book of accounts within six weeks and ensure that any future voting related to its recovery plan is conducted on an independent platform.

In early September, WazirX filed an application with the Singapore High Court seeking a six-month moratorium. The goal was to give the company time to stabilize its operations and work out a comprehensive restructuring plan.

WazirX’s founder Nischal Shetty has pointed fingers at various parties for the current situation, including its custodian Liminal and the popular crypto exchange Binance. According to Shetty, Binance controlled a major portion of WazirX’s funds, which he claims has hampered the exchange’s ability to compensate users for their losses. In response, Binance has firmly denied these allegations, asserting that it has never owned, operated, or controlled WazirX, while criticizing Shetty for attempting to shift blame.

As part of the court’s moratorium ruling, WazirX secured critical relief. The court ordered that no resolution could be passed for winding up the exchange’s holding company Zettai and no legal proceedings could be initiated against it without the court’s approval.

The presiding judge urged WazirX’s legal team to disclose whether the exchange held any assets beyond the stolen tokens. The judge acknowledged that the exchange had acted in “good faith” by pursuing the moratorium but noted the importance of transparency in its recovery efforts. In a statement following the ruling, WazirX founder Nischal Shetty stated:

“Our immediate filing for the moratorium was a decisive step taken to ensure the fastest, fairest, creditor-approved, legally binding path to resolution where creditors have a token choice and potential upside in a bull run.”

Meanwhile, the hacker behind the July breach has almost completed laundering the stolen funds, using privacy tools like Tornado Cash to obscure transactions. WazirX’s legal advisers have expressed doubts about whether customers will be made whole in cryptocurrency terms.

As per a recent X post, the troubled exchange will only open cryptocurrency withdrawals once a restructuring proposal, in the form of a Scheme, is approved by creditors and sanctioned by the Singapore High Court, a process expected to take at least six months. Until then, trading on WazirX remains suspended.

Singapore Court Grants WazirX 4-Month Time to Sort Restructuring Plan