SUMMARY
- Crypto exchange WazirX has submitted a request to a Singapore court for a moratorium.
- This decision is intended to provide the exchange with the necessary break to allow Zettai to work on restructuring its debts.
- A 30-day moratorium is automatically in effect once the application is filed.
Following a massive crypto theft worth $230 million last month, crypto exchange WazirX announced on Wednesday (August 28) that it has submitted a request to a Singapore court for a moratorium.
In a blog post, the exchange disclosed that Zettai Pte, which owns the shares in its subsidiary and parent company Zanmai Labs Pvt Ltd, submitted the request a day earlier on August 27. This decision is intended to provide the exchange with the necessary break to allow Zettai to work on restructuring its debts under a scheme of arrangement.
A 30-day moratorium is automatically in effect once the application is filed. Subsequently, the Singapore Court will decide whether to approve the request. WazirX has not yet announced the date of the hearing.
“We wish to update all users of the WazirX Platform that Zettai Pte Ltd has taken the next step in its efforts to address users’ cryptocurrency balances on the platform… and has on 27 August 2024 filed an application with the High Court of Singapore for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018…,” the post said.
WazirX added that there is an ongoing dispute between Zettai and Binance. “Nonetheless, while this dispute remains ongoing, Zettai has taken the initiative to concurrently facilitate a solution for users of the platform (WazirX) as contingent unsecured creditors of Zettai as quickly and effectively as possible.”
This announcement comes just over a week after the company notified its users about its intention to seek a moratorium in the High Court of Singapore to pursue a restructuring process. At that time, the exchange explained that this process would allow it to present a proposal to its creditors for the restructuring of its debts, aiming for stronger recoveries for creditors compared to a liquidation.
Moreover, the exchange mentioned that users will be compensated with a share of the available token assets based on their proportionate share of all users’ unsecured claims for their account balances as part of the planned restructuring.
They expect that if there’s a planned change, the effects of the cyberattack will be spread out fairly among users who are considered equally as unsecured creditors. Each user will get a portion of the platform’s token assets based on how much they owe compared to all other users’ unsecured claims for their account balances.
The exchange also plans to implement various strategies to increase token recovery, including tracing and recovering stolen tokens, launching revenue-generating products, profit-sharing schemes, and exploring potential partnerships with third parties.
In response, the exchange stated that it expects Zettai to require at least six months to review the terms of the restructuring plan and collaborate with the relevant parties.
This development follows the theft of nearly $234.9 million in crypto assets, representing 45% of the total user funds on the platform. Subsequently, the exchange temporarily halted withdrawals and filed a FIR regarding the cyberattack.
The crypto exchange proposed a socialized loss strategy last month, suggesting that customers should absorb 45% of the losses from the hack. However, this proposal was met with backlash from users online, leading to its abandonment.
In the aftermath, the exchange lifted the withdrawal suspension and began allowing INR balance withdrawals starting August 26, in a phased method.
