As a seasoned crypto investor with over a decade of experience navigating the wild west of digital currencies, I find myself once again observing the rollercoaster ride that is the cryptocurrency market. The recent news regarding WazirX’s four-month moratorium granted by a Singapore court has piqued my interest.
As a researcher, I’ve just learned that a Singapore court has granted my cryptocurrency exchange, WazirX, a four-month reprieve in response to our request for relief following the $234 million hack we experienced in July. The decision, made public on September 25, comes with certain conditions that we must fulfill. This temporary stay provides us with some time to reorganize and work diligently towards compensating the users who were affected by this unfortunate incident.
Under the terms set by the court, WazirX is instructed to provide details about their wallet holdings, including addresses, through an affidavit. They must also answer users’ inquiries. Moreover, the exchange should disclose all financial records within six weeks and arrange for any future recovery plan votes to take place on a separate, independent platform.
At the beginning of September, WazirX submitted an appeal to the Singapore High Court, requesting a period of six months as a reprieve. This respite aimed to provide the firm with the necessary breathing space to rectify its business operations and devise a thorough reorganization strategy.
Nischal Shetty, founder of WazirX, has implicated several parties, including its custodian Liminal and Binance, in the current predicament. In his view, Binance held a significant portion of WazirX’s funds, which he believes prevented the exchange from reimbursing users for their losses. However, Binance has strongly refuted these accusations, stating that they have never owned, managed, or controlled WazirX, while simultaneously criticizing Shetty for attempting to dodge responsibility.
A Sigh of Relief for WazirX
In response to the court’s decision on the moratorium, WazirX was granted significant respite. The court mandated that no resolution could be enacted for the dissolution of its holding company Zettai, and no legal actions could be taken against it without prior court approval.
The judge overseeing the case asked WazirX’s legal representatives to reveal if any assets aside from the stolen tokens were under their control. The judge recognized that WazirX had acted honorably by requesting a moratorium, but emphasized the significance of openness in their recovery process. In response to the court decision, Nischal Shetty, founder of WazirX, declared:
We promptly filed for the moratorium as a crucial action aimed at creating the quickest, equitable, court-sanctioned, and creditor-agreed upon solution. This process gives creditors minimal involvement and the possibility of benefits when market conditions are favorable.
In the meantime, the individual responsible for the data breach in July is nearly done moving the stolen assets, employing tools such as Tornado Cash to conceal these transfers. However, there is uncertainty among WazirX’s legal counsel whether it will be possible to fully reimburse affected customers in terms of cryptocurrency.
According to a recent announcement, the struggling exchange won’t enable cryptocurrency withdrawals until a restructuring plan, in the form of a Scheme, is accepted by creditors and endorsed by the Singapore High Court. This process, anticipated to take at least six months, is currently ongoing. Consequently, trading on WazirX continues to be suspended during this period.
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2024-09-26 11:25