Jai Sahu
Summary
- To resume trading on its platform, WazirX is implementing a Singapore scheme of arrangement.
- Zettai Pte Ltd, which manages WazirX’s crypto assets, is also launching a new decentralized exchange (DEX) to support recovery efforts.
- This scheme aims to provide liquidity and additional recovery options to WazirX users through rebalancing and tokenization.
Hacked cryptocurrency exchange WazirX has announced plans to resume trading on its platform as part of an effort to restore funds to users affected by a cyberattack that led to the loss of nearly $230 million in digital assets from one of its multisig wallets.
Singapore Scheme of Arrangement for Trade Resumption
In a media town hall on Wednesday, November 6, WazirX disclosed that it is pursuing a Singapore scheme of arrangement to facilitate the reopening of trading. This proposed scheme is designed to provide liquidity and additional recoveries to WazirX users through a process of rebalancing and tokenization. Upon approval of the scheme, WazirX plans to release liquid assets worth $284 million and issue recovery tokens to all users.
No Set Timeline for Platform Relaunch
While WazirX aims to implement the scheme as quickly as possible, the company has not specified an exact timeline for when trading will resume on the platform. Users will receive recovery tokens via an airdrop into their WazirX wallets to cover the portion of the scheme debt that cannot be settled by WazirX’s available liquid assets.
Zettai Pte Ltd to Launch Decentralized Exchange for Recoveries
Zettai Pte Ltd, the parent company of Zanmai Labs, which operates WazirX, is preparing to launch a new decentralized exchange (DEX) to assist in recovery efforts. The upcoming DEX will introduce features like crypto staking and futures trading, aimed at maximizing the recovery process for WazirX users.
Formation of a Committee of Creditors and Court Approval
In a recent update, WazirX revealed plans to establish a committee of creditors to guide its restructuring process. A Singapore court has granted WazirX a four-month conditional moratorium, allowing the exchange time to restructure its liabilities. Legal advisors have previously indicated that, even after restructuring, customers may only recover 55-57% of their funds.
In July, WazirX experienced a security breach that resulted in the loss of $230 million in digital assets. WazirX founder Nischal Shetty attributed the security failure to custody wallet platform Liminal, though he later stated that Binance held a significant portion of Zettai Labs’ funds. Both Liminal and Binance denied these claims.
Government Investigations and Allegations of Fund Transfers
Following the breach, multiple government agencies, including the Financial Intelligence Unit, Intelligence Bureau, and the Indian Computer Emergency Response Team (CERT-In), launched investigations into the WazirX hack. Recently, CoinSwitch co-founder Ashish Singhal accused WazirX of transferring over $73 million in crypto assets to other exchanges after the hack, intensifying scrutiny around the incident.