Key Takeaways
- The court’s decision allows WazirX to proceed with a restructuring process under the Companies Act 1967
- WazirX estimates that users can expect to recover a substantial portion of their lost funds, potentially between 75% and 80% of their account balances.
The Singapore High Court has approved a restructuring plan for WazirX, the Indian crypto exchange that suffered a $230 Million hack in July 2024. The plan, filed by WazirX’s parent company, aims to facilitate the recovery and return of funds stolen by the Lazarus Group, a hacking group linked to North Korea.
The court’s decision allows WazirX to proceed with a restructuring process under the Companies Act 1967, prioritizing the recovery of funds for affected users. The plan outlines a strategy to maximize creditor recovery while avoiding liquidation, which the court deemed to be a less favorable outcome for all parties involved.
WazirX estimates that users can expect to recover a substantial portion of their lost funds, potentially between 75% and 80% of their account balances. The recovery plan includes the issuance of “recovery tokens” to represent remaining claims. These tokens will allow users to participate in future platform profits and benefit from the recovery of any additional stolen assets.
The court emphasized the need for a swift resolution and the expeditious return of funds to users. The restructuring plan, supported by financial projections from an independent firm, was deemed to be the most viable path for achieving this objective.
The next step in the process involves a user voting period, where affected users will have the opportunity to vote on the proposed restructuring plan. Following the voting period, if the plan is approved by a majority of users, initial payouts are expected to commence within 10 business days.
WazirX has consistently maintained that the cyberattack was not the result of any negligence or wrongdoing on its part. The company is actively collaborating with authorities in the United States, Japan, and South Korea to recover additional stolen assets and pursue all available avenues for user compensation.
Zettai, the parent firm behind WazirX, filed for a moratorium at the Singapore High Court in August last year, proposing a restructuring plan under a Singapore Scheme of Arrangement, which is a court-approved legal process firm which allows a firm to propose a binding arrangement with creditors, ensuring resolution while avoiding liquidation.
