WazirX Users Approve Restructuring Plan Aiming to Recover 234M Stolen Funds

Crypto exchange WazirX users have reapproved a revised restructuring plan following its rejection by the Singapore High Court earlier this year, marking a potential turning point in the recovery of nearly $234 million stolen from the platform in mid-July 2024 [1]. The latest proposal, approved by 95% of voting creditors, now awaits judicial approval before it can be implemented. If accepted, the exchange’s founder, Nischal Shetty, has indicated that WazirX could resume operations and begin repaying users within 10 days of the scheme taking effect [1]. This timeline contrasts with earlier estimates from George Gwee, a director at restructuring firm Kroll, who suggested users could expect a two to three month delay following court approval [1].

The previous restructuring proposal, approved by users in April, was rejected by the Singapore High Court due to concerns over how the proposed regulatory framework for Digital Token Service Providers might affect the value and distribution of recovery tokens [1]. These tokens represent outstanding user claims and are intended to provide ongoing compensation as WazirX generates profits and recovers assets [1]. The revised plan now shifts the responsibility of token distribution to Zanmai India, a reporting entity under the jurisdiction of India’s Financial Intelligence Unit [1]. This change reflects a strategic shift in WazirX’s operational structure, with the parent company, Zettai, relocating key operations to a subsidiary in Panama following the court’s decision [1].

WazirX’s restructuring is occurring amid a regulatory tightening in Singapore, where the central bank has required local crypto service providers to cease offering digital token services to overseas markets by June 30 [1]. The regulatory environment has added complexity to the restructuring process, with users expressing both optimism and skepticism. While many have welcomed the chance for a resolution and the prospect of recovering at least part of their funds, others have raised concerns about delays, the regulatory issues highlighted by the court, and the relocation of company operations [1]. Some users have also pointed out that those who held unhacked assets could face losses if the value of the recovery tokens does not adequately reflect the original value of their holdings [1].

The delay in repayment has been a recurring theme, with WazirX warning that without restructuring, liquidation of its assets could extend repayments to as far as 2030 [1]. Online discussions on platforms like X and Reddit indicate that many users are simply seeking closure to the crisis, even if the full recovery remains uncertain [1]. Some users have also called for legal action against WazirX, though a separate April 16 ruling by the Supreme Court of India dismissed a petition from 54 victims, stating it lacked authority over crypto policy matters [1].

Source: [1] WazirX users approve new restructuring plan after hack (https://cointelegraph.com/news/wazirx-users-approve-new-restructuring-plan-after-hack)