Key Points
- Zettai Pte Ltd, WazirX’s parent company, files for a moratorium with the Singapore High Court to facilitate restructuring following a major cyberattack.
- The company estimates that 4-6 months are needed to develop a restructuring plan to provide an equitable solution for affected users.
Moratorium Request Filed in Singapore
Zettai Pte Ltd, the Singapore-based holding company behind the Indian cryptocurrency exchange WazirX, has taken a significant step in its recovery efforts following a devastating $230 million exploit in July 2024. On Tuesday, August 27, 2024, the company filed an application with the High Court of Singapore for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018.
Nischal Shetty, Director of Zettai Pte Ltd, applied to facilitate the company’s intention to restructure its liabilities under a scheme of arrangement. This moratorium would provide Zettai with crucial “breathing space” to progress its restructuring plans and address users’ cryptocurrency balances on the WazirX platform if approved.
Automatic 30-Day Protection and Next Steps
Following the application, an automatic 30-day moratorium has commenced. However, the Singapore Court has yet to schedule a hearing to determine whether to grant an extended moratorium and its total duration. This period of protection is vital for Zettai as it develops a comprehensive restructuring strategy.
Proposed Restructuring Scheme
Zettai anticipates that under the planned restructuring scheme, the impact of the July exploit would be allocated pro-rata among users, who would rank equally as unsecured creditors. This approach aims to provide users with a share of available token assets in proportion to their share of all users’ unsecured claims for their account balances.
The company estimates it will need at least four to six months to consider the terms of the restructuring plan and work with relevant stakeholders. While acknowledging this timeline may be longer than many users hoped for, Zettai argues it represents the “fastest route to allowing the reopening of cryptocurrency withdrawals” in a legally binding, equitable, and creditor-approved manner.
Ongoing Challenges and Next Steps
Zettai also noted an ongoing dispute with Binance, subject to confidentiality obligations, but emphasized its commitment to concurrently facilitate a solution for users as quickly and effectively as possible.
Zettai plans to hold a town hall event via video conference next week to engage with affected users and provide more information. This event will explain the moratorium and the proposed restructuring scheme and address users’ questions.
As WazirX and Zettai Pte Ltd navigate this critical period, the outcome of their restructuring efforts will be closely watched by both the cryptocurrency community and regulatory bodies, potentially setting precedents for how major security breaches are handled in the evolving digital asset landscape.
