Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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WazirX has secured court approval for its long-awaited debt restructuring plan, marking a major milestone in its recovery from last year’s high-profile hacking incident.
CEO Nischal Shetty said Monday that the Singapore High Court has approved the scheme, paving the way for the exchange to move ahead with its rehabilitation efforts.
Shetty did not disclose additional details about the approved plan, and a WazirX spokesperson did not respond to requests for comment.
However, the approval marks a turning point for the embattled platform, which has spent over a year navigating a complex restructuring process to restore user balances and resume full operations.
Singapore Court Approval Caps Months Of Negotiations And Plan Revisions
The court’s decision follows months of creditor engagement and revisions to the company’s original proposal. In August, more than 95% of WazirX’s creditors voted in favour of the updated scheme, filed by its Singapore-based parent company, Zettai Pte Ltd.
The vote accounted for about $206.9m in validated claims from more than 149,000 account holders.
Under the restructuring plan, WazirX aims to redistribute the remaining assets fairly, in line with Singapore’s Insolvency, Restructuring and Dissolution Act of 2018.
To achieve this, the exchange chose a court-supervised Scheme of Arrangement instead of liquidation. This approach helped avoid years of delays — liquidation could have postponed recoveries until 2030 or later.
Now that the court has approved the plan, WazirX can begin returning assets and gradually reopening trading services.
According to company filings, the first round of token distributions will begin within 10 business days of the scheme taking effect.
If all goes as expected, users could recover about 85% of their account balances, based on valuations from the date of the hack.
Revised Scheme Clears Hurdles With Over 95% Creditor Approval
The road to approval was not smooth. Initially, in March, more than 93% of creditors backed WazirX’s restructuring plan. However, in June, the Singapore High Court rejected the proposal due to regulatory concerns over token distributions.
In response, WazirX revised the plan. The new version routed repayments through its Indian entity, Zanmai Labs, which is registered with the country’s Financial Intelligence Unit.
As a result, the updated proposal gained even stronger support in the second vote, held between July 30 and Aug. 6. The process, coordinated by Kroll Issuer Services, was limited to users who held positive account balances as of July 18, 2024.
Encouragingly, the high level of participation reflected renewed confidence in WazirX’s recovery plan after months of uncertainty.
Meanwhile, Zettai Pte Ltd, acquired by Binance in 2019, played a pivotal role throughout the restructuring. The Singapore entity retained custody of WazirX’s crypto assets and liabilities, while Zanmai Labs continued to oversee fiat operations in India.
WazirX Eyes Swift Return Of Trading And Withdrawals Post-Approval
Following the hack, Zettai sought a moratorium from the Singapore High Court. The goal was to protect against global creditor actions and prevent assets from being split across jurisdictions.
With the moratorium in place, WazirX was able to consolidate its restructuring under Singapore law. This ensured that both Indian and international users would be treated uniformly. Moreover, it reduced the risk of conflicting legal claims — a key issue after several Indian users questioned the applicability of WazirX’s terms of service.
The hacking incident had caused heavy losses and frozen withdrawals, pushing the exchange close to insolvency. However, the court-approved restructuring plan now offers a clear path to stabilize operations and rebuild user trust.
If all goes as planned, WazirX could resume trading and withdrawals within days of the scheme taking effect.
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