The High Court (HC) of Singapore has approved WazirX’s modified debt repayment plan, clearing the path for the crypto exchange to resume operations nearly 15 months after a cyberattack wiped out almost $230 million in crypto assets from the platform.
“As soon as the scheme is legally effective based on today’s verdict, we will start platform operations within 10 business days,” said Nischal Shetty, founder and chief executive officer (CEO) of WazirX.
For context, WazirX operates through two entities — parent company Zettai in Singapore, and Zanmai Labs in India.
As the next step in its revival efforts, WazirX’s parent company will file the Singapore HC order with the country’s Accounting and Corporate Regulatory Authority (ACRA). Once its creditor-approved debt restructuring scheme takes effect, the platform will restart potentially by the end of October.
Notably, this development comes amid reports that WazirX was moving its operations to Panama after Singapore tightened its regulatory stance for crypto transactions.
For context, the company incorporated a new subsidiary Zensui Corporation in Panama earlier this year. This came after Singapore’s central bank set a June 30 deadline for local crypto service providers to stop offering digital token (DT) services to overseas markets.
How WazirX Plans To Repay Its Users
In the amended scheme of arrangement approved by the Singapore HC, WazirX introduced two key modifications. First, once the scheme takes effect, Zettai will transfer all crypto-related operations of the platform to Zanmai India. The Indian subsidiary will then facilitate withdrawals on the crypto exchange.
Second, any surplus funds from the company’s subsidiaries will be directed to the parent company through the declaration and payment of dividends. These funds will then be used to buy back recovery tokens from users.
However, a key portion of the restructuring scheme, which outlines the mechanism for user recoveries, remains unchanged. Under the plan, WazirX will compensate hack victims with 85.5% of their portfolio value within 10 business days of the scheme’s ratification. This payment will be made using the platform’s rebalanced net liquid assets, either in the original crypto tokens held, or in cases of low liquidity their equivalent value in USDT.
For the remaining 14.5% of claims, WazirX will issue recovery tokens to users on a pro-rata basis. The company will buy back these tokens once unencumbered recoveries exceed $10 million, with evaluations conducted every quarter.
Elsewhere, in a town hall event last year, the crypto platform also announced plans to launch a decentralised exchange (DEX) as well as a new crypto token to enable users to recover some of their lost funds.
WazirX Facing Legal Trouble In India As Well
Following the July 2024 hack, WazirX was criticised for being too slow to communicate the details of the incident to its users and for…
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