WazirX's Fate Hangs in Balance: Creditors to Vote on Restructuring Plan

WazirX, a troubled Indian cryptocurrency exchange, is set to undergo a critical vote by its creditors in the coming weeks. The vote will determine the fate of the exchange's restructuring plan, which, if approved, will extend the recovery process to five years. This decision comes following a ruling by the High Court of Singapore, which allowed WazirX to seek a restructuring plan instead of facing liquidation.

The proposed restructuring plan involves a phased compensation scheme, including the launch of a decentralized exchange (DEX), the issuance of recovery tokens, and regular buybacks to compensate affected users. If the vote passes, with at least three-quarters of the creditors approving the plan, WazirX aims to start distributing compensation in cryptocurrency as early as April 2025.

However, the proposed recovery plan remains controversial, and if the vote fails, WazirX will be forced into liquidation. The company has warned that this process could take several years, with reduced returns for creditors. WazirX claims that creditors could recover up to 80% of their balances through its new DEX and recovery token model, but the success of this plan remains uncertain.

The vote by WazirX creditors is a crucial step in determining the future of the troubled exchange. The outcome will not only impact the recovery process for creditors but also send a strong signal to the broader cryptocurrency industry about the challenges and potential solutions for exchanges facing financial difficulties.