WazirX is going to court with support of 0.0001% users

WazirX crypto exchange management claimed in a fresh moratorium affidavit to Singapore High Court that it has received support of 441 users of their restructure plan meant to compensate the victim users post the Rs 2000 crore hack. That amounts to 0.0001% of the total 4.2 million active users of WazirX that have been hit by the cyber hack on July 18.

WazirX management, vis-a-vis Zettai Pte Ltd, their parent company based out of Singapore, has a hearing scheduled for September 25 at the Singapore HC to apply for a moratorium, which will deter any legal action against them for the next six months. 

The second affidavit filed by WazirX co-founder and Zettai director Nischal Shetty was shared with the users on Tuesday. In the affidavit, Shetty has claimed that the exchange has received a total of 1700 emails regarding the moratorium and subsequent restructuring plan. Out of the 1700 emails, only 500 email addresses could be verified as genuine, and out of them, 441 have “supported” the exchange management.

“A number of Zettai’s creditors have come forward in support of the moratorium sought by Zettai. As of the morning of 9 September 2024, Zettai received more than 1700 emails from the Platform’s users in connection with the moratorium application and is in the process of verifying the support received. Of the 500 emails verified to date, 431 are in support, representing liabilities amounting to about USD9,200,000 in value.

Zettai will keep this Honourable Court and Zettai’s creditors apprised as we continue to receive any further support from creditors, and also verify and assess the emails that come in on a daily basis. The support that Zettai has received so far has been positive. I anticipate that as Zettai continues to explain the rationale for this application to creditors and as more details of the proposed scheme are shared, support for the moratorium will only grow,” said Shetty in the affidavit.

On July 18 this year, the multi-sig wallet of WazirX exchange was breached by unknown hackers who then stole cryptocurrencies worth $234 million, which is 45% user funds. Since the incident, WazirX has halted all withdrawals on their platform  and approached the Singapore HC for a six month relief, against any legal action. 

For now, WazirX has allowed only 66% INR withdrawals for all users and has locked 100% crypto funds. As per Shetty, the restructure plan of WazirX will ensure equitable loss sharing for all users post the hack, a decision that has left millions of users fumin g . 

Why WazirX needs users’ support in Singapore High Court?

WazirX co-founder Nischal Shetty shared a blueprint of the further course of action of the exchange. According to Nischal, the exchange will be sharing the “support emails” it received with the Singapore HC, which will then come to a decision on the moratorium application. If the moratorium application is approved, the exchange will hold a poll among its users where the necessary criteria for the proposed restructuring scheme to be passed is more than 50% in favour and more than 75% in value, of each class of users present and voting.

If the scheme is approved by users, then WazirX through Zettai will get it sanctioned by the court in the next 30 days and try to implement it afterwards, though the exact date can’t be determined as of now.