The recent decision by the Singapore High Court to set aside its previous rejection of WazirX’s restructuring plan has breathed new life into the exchange’s efforts to recover funds for users affected by the $230 million hack in July 2024. The court has ordered a new creditor vote on an amended scheme, potentially paving the way for WazirX to reopen and begin distributing funds to impacted users.
The court’s ruling comes after WazirX’s parent company presented further arguments, leading to the extension of Zettai’s moratorium protection and the approval of a revote on the revised plan. If the amended scheme garners the necessary approval from creditors and court sanction, the WazirX platform is set to resume operations under Zanmai’s supervision within Indian jurisdiction.
The decision marks a significant turnaround from the court’s earlier rejection of WazirX’s moratorium application, which raised concerns about transparency issues related to Zettai’s undisclosed relocation to Panama and rebranding as Zensui Corporation. The initial rejection left users without access to their funds for an extended period, fueling frustration and uncertainty among affected individuals.
WazirX founder, Nischal Shetty, has announced plans to launch Proof of Reserves once the platform reopens, ensuring that token balances remain unchanged during the offline period. An independent assessor has verified current holdings and submitted a report to the court and creditors, bolstering transparency in the recovery process.
Despite initial pledges to return 85% of user balances through recovery tokens, legal challenges and investor objections have stalled progress, leading to delays and increased user frustration. The court’s decision to allow a revote provides a second chance for fund recovery, following months of legal uncertainty and resistance to the initial restructuring plan.
The WazirX hack in July 2024 exposed vulnerabilities in the exchange’s security measures, resulting in the loss of $230 million in cryptocurrency assets. The incident also highlighted ownership conflicts between Zettai and Binance, complicating the restructuring process and prolonging the recovery efforts.
Users have demanded greater transparency and security measures, including the implementation of Proof of Reserves to prevent future security incidents. WazirX plans to issue recovery tokens representing unrecovered funds, offering users the opportunity to claim a portion of their affected balances pending successful completion of the restructuring process.
As the revoting process commences and the potential reopening of the platform looms, users eagerly await concrete timelines for fund distributions and the resumption of operations. The court’s decision to order a new creditor vote signals a positive step towards WazirX’s funds recovery efforts, offering hope to affected users and stakeholders alike.