WazirX, a prominent cryptocurrency exchange, has announced that its parent company, Zettai Pte Ltd (“Zettai”), has filed for a moratorium in the Singapore High Court. This move is aimed at restructuring the platform’s liabilities following a significant cyberattack on July 18, 2024, which led to the theft of a substantial amount of cryptocurrency tokens.
The Filing and Its Purpose
On August 27, 2024, Zettai officially filed an application under section 64 of the Insolvency, Restructuring and Dissolution Act 2018. The moratorium seeks to provide Zettai with temporary legal protection, halting creditor enforcement actions while it works on a restructuring plan. This moratorium is intended to allow Zettai to address users’ cryptocurrency balances in an organized and fair manner.
The Singapore Court has yet to schedule a hearing for this application. If granted, the moratorium will provide Zettai with the breathing space needed to develop and implement a Scheme of Arrangement (“Scheme”), which will serve as the framework for restructuring the platform’s liabilities and distributing available token assets among users.
Impact on Users and Restructuring Plan
The restructuring plan proposed by Zettai under the Scheme will likely involve pro-rata distribution of available token assets among users, who are considered unsecured creditors. This approach aims to ensure a fair recovery process for all users affected by the cyberattack.
Zettai’s plan includes several mechanisms to enhance token recoveries, such as tracing and recovering stolen tokens, introducing revenue-generating products, and exploring profit-sharing opportunities with third-party partners. The company has emphasized that this process, while lengthy—estimated to take at least six months—represents the most efficient and legally binding solution for users.
The Importance of the Moratorium
Zettai’s application for a moratorium is seen as a crucial step in facilitating the restructuring process. The company has urged users to support the moratorium, highlighting that it is in their best interests to ensure the most favorable outcome. Without the moratorium, alternative routes to resolving the cryptocurrency balances might involve undefined risks and extended timelines.
Upcoming Townhall and Further Steps
To address user concerns and provide clarity on the moratorium and restructuring process, Zettai has scheduled a town hall meeting via video conference in the week commencing September 2, 2024. During this session, financial and legal advisors will explain the key features of the moratorium and the Scheme and answer user questions.
Zettai is being advised by Kroll Pte Ltd on financial matters, Rajah & Tann Singapore LLP on legal issues in Singapore, and Nishith Desai Associates on legal matters in India.
FAQs for Users
Zettai has also provided a detailed FAQ section, explaining the significance of the Scheme of Arrangement, the purpose of the moratorium, and what users can expect in the coming months. Key questions include the definition of a moratorium, the role of unsecured creditors, and the timeline for reopening cryptocurrency withdrawals.
For users, the next steps involve staying informed through official updates from Zettai and participating in the upcoming town hall to ensure they are aware of how the restructuring will proceed.
For more detailed information, users can access the full announcement on the WazirX blog.
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