Crypto exchange platform WazirX, which lost $230-million in a cyber attack last month, has filed an application with a Singapore court seeking a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018, to allow it some time to restructure its liabilities.
In a blogpost shared on August 28, the crypto exchange informed that the application for the moratorium was filed by its largest shareholder Zettai Pte Ltd a day ago.
It wrote in the blog post, “We wish to update all users of the WazirX Platform that Zettai Pte Ltd (“Zettai”) has taken the next step in its efforts to address users’ cryptocurrency balances on the platform following the cyberattack and theft of crypto tokens from the platform on 18 July 2024, and has on 27 August 2024 filed an application with the High Court of Singapore (HC/OA 861/2024) for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate its intention to restructure its liabilities under a scheme of arrangement (“Scheme”). Copies of the application, as well as the affidavit in support thereof, have been provided via email to users of the platform.”
The moratorium, WazirX said, will give it the necessary “breathing space while Zettai progresses with a restructuring, which represents the most efficient way to address users’ cryptocurrency balances on the platform and facilitate recovery for users”.
An automatic moratorium of 30 days arises from the filing of the application, i.e., August 27 2024, and the Singapore HC will determine whether to grant the moratorium sought at a hearing of the application (and the duration of the moratorium, if so granted).
A date of hearing has not been fixed yet, WazirX informed.
Further, there is an ongoing dispute between Zettai and Binance, for which Zettai has taken the initiative to concurrently facilitate a solution for users of the platform as contingent unsecured creditors of Zettai as quickly and effectively as possible, WazirX added.
The company anticipates “that under a planned restructuring, the impact from the cyberattack will be allocated pro-rata across users who rank equally with each other as unsecured creditors, and users will receive a share of available token assets associated with the Platform proportionate to their share of all users’ unsecured claims for their account balances”.
A moratorium is key to ensuring that a restructuring is possible, and it is in the users’ interests to support Zettai’s moratorium application, it added. As such, WazirX, along with its advisors, will be holding a town hall on September 2 to explain the salient aspects of the moratorium.
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