WazirX's Fate Hangs in Balance: Restructuring Plan or Liquidation by 2030

WazirX, a prominent Indian cryptocurrency exchange, is on the brink of a significant decision as its creditors weigh a restructuring plan that could potentially revive trading by April 2025. The plan, which offers a 52% debt settlement now with the remaining 48% to be paid from future profits and recoveries, is a critical step towards addressing the losses incurred from a $235 million hack in July 2024.

The proposed restructuring plan has been approved by the Singapore High Court, allowing WazirX creditors to decide the exchange's future. A vote is set to take place, with at least 75% approval required for the plan to proceed. If successful, trading may recommence by April 2025, with initial payouts starting within 10 business days. This development comes days after the Singapore High Court granted WazirX approval to convene a Scheme meeting, enabling creditors to vote on the proposed recovery plan.

However, if the restructuring plan is rejected, WazirX will undergo liquidation under Singapore’s Companies Act. This could postpone repayments until 2030, significantly reducing the chances of full recovery for affected users. Industry experts have warned that liquidation could lead to unpredictable asset distribution, extended payout timelines, and decreased recoverable asset values due to market volatility and operational challenges.

To facilitate debt repayments and restore operations, WazirX plans to launch a decentralized exchange (DEX) and introduce recovery tokens. The proposal also includes periodic buybacks to stabilize the platform and improve financial sustainability. The restructuring plan will allocate Net Liquid Platform Assets to creditors as part of the recovery process. The company has been working closely with the Committee of Creditors (CoC) to ensure faster distribution and prevent prolonged delays in fund recovery.

The vote will determine whether the Indian exchange can resume trading or enter a liquidation process. The restructuring plan is an alternative to liquidation, offering creditors a more immediate path to fund recovery. With over 4.4 million creditors involved, the voting process is a crucial moment for the Indian exchange. Meanwhile, WazirX continues its efforts to recover stolen funds, freezing $3 million in assets as part of its recovery plan. The exchange is working with law enforcement to track stolen assets and ensure a smooth recovery process.