Indian crypto exchange Wazirx has announced that a moratorium has been filed in Singapore’s High Court under the Insolvency, Restructuring and Dissolution Act to address users’ crypto balances. The move aims to provide a 30-day relief period for Wazirx to reorganize liabilities through a scheme of arrangement. The Singapore court will determine the duration of the moratorium.
Wazirx Files for Moratorium in Singapore Court to Address Users' Crypto Balances
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Wazirx Seeks Court Approval to Restructure Liabilities After Cyberattack
Indian cryptocurrency exchange Wazirx has announced that Zettai Pte Ltd., the Singapore-based holding company for Wazirx, applied for a moratorium in Singapore’s High Court on Aug. 27 to restructure its liabilities under a scheme of arrangement.
Wazirx wrote on social media platform X Wednesday:
We have taken the next step to address users’ crypto balances following the 18 July 2024 cyberattack by filing for a moratorium with the Singapore High Court under the Insolvency, Restructuring and Dissolution Act 2018.
“This will provide the necessary space to restructure crypto liabilities of the platform through a scheme of arrangement,” the exchange added.
The moratorium application followed the cyberattack on July 18 that resulted in the theft of more than $230 million in cryptocurrency from the Wazirx platform, the exchange explained in a blog post. The filing aims to grant a 30-day automatic relief period, allowing Zettai time to address the platform’s losses by reorganizing its liabilities. The Singapore Court will decide on the application and its duration, with a hearing date yet to be determined.
Zettai, currently in a confidential dispute with Binance, is pursuing the moratorium to facilitate a resolution for its users, who are classified as unsecured creditors. Under the restructuring plan, the impact of the cyberattack would be evenly distributed among users based on their claims, with recovery proportionate to their account balances.
The proposed scheme of arrangement, if sanctioned, would legally bind all parties and is expected to take at least six months to complete. Zettai claimed that the restructuring approach offers more flexibility than other potential options. The company plans to host a town hall meeting to explain the restructuring process and address user questions. According to Zettai, a court-approved scheme would be the fastest way to reopen cryptocurrency withdrawals, contingent on the approval of creditors and the court.
What do you think about Wazirx’s decision to seek a court-approved moratorium to manage its liabilities following the July 18 cyberattack? Let us know in the comments section below.
