WazirX crypto exchange, through its parent company, Zettai, is going to approach the Singapore High Court on September 3, seeking a moratorium application, which will temporarily halt legal actions against the exchange, till it comes up with a plan to compensate its 1.6 crore users in India.
Additionally, WazirX is also holding a virtual Townhall event on Monday afternoon to discuss their proposed restructuring plan and moratorium application with their users. On July 18, the exchange had suffered a cyber hack that resulted in loss of $230 Million worth Rs 2000 crores of user funds.
The moratorium application is a critical move for WazirX as it aims to seek more “breathing space” while their parent company Zettai navigates its current financial challenges. WazirX has also invited its users to attend both the Townhall event on September 2 and court proceedings in Singapore on September 3 virtually.
Understanding Zettai (WazirX) Moratorium Application
A moratorium application typically requests a temporary suspension or delay of certain activities, such as loan payments, debt collection, or legal proceedings.
In the case of WazirX, the moratorium seeks to provide the company with time to stabilize its operations after a massive cyber attack on July 18, which led to the loss of 45% of user funds, amounting to $234 million (around ₹2000 Crore).
Zettai’s application to the Singapore High Court aims to provide this much-needed breathing space, allowing WazirX to restructure its operations and explore possible avenues for recourse for affected users.
Townhall Event on September 2
Ahead of the court hearing, WazirX has organized a Townhall event today at 1:30 PM IST to address the restructuring plan and the moratorium application with its users. The Townhall is expected to provide clarity on the steps WazirX is taking to recover from the cyber attack and how it plans to compensate affected users.
Key Issues to be Discussed in Townhall Event
Clarification on Fund Discrepancies
Recently, WazirX admitted to a mistake in reporting user balances, initially stating a total of $570 million, which was later corrected to $546 million. Users expect detailed explanations about this discrepancy and how it impacts their claims.
Legal Expenses Deduction
Users are concerned about the deduction of Rs 100 crore ($12 million) from their funds for legal expenses. Questions regarding the justification of this deduction and the lack of contributions from the WazirX team are expected to be raised.
Distribution of Remaining Crypto
Users seek clarity on how the remaining funds will be distributed. Will it be based on the value of the crypto on the day of the hack, or will the distribution consider potential future value increases?
User Expectations
Users are demanding transparency and accountability from WazirX. They are particularly interested in understanding how the remaining funds will be managed and whether any future gains in crypto value will be considered in the compensation plan. There is also a strong push for WazirX to reveal more information about its financial dealings, particularly those related to the hack and the subsequent legal proceedings.
Also Read: WazirX Keeps 100 Crores from User Funds for “Legal Costs”; Is Facing Four Legal Notices
