George Miller
WazirX, an Indian cryptocurrency trading platform that experienced a security breach resulting in a loss of $235 million, is currently facing a significant decision point. The exchange has put forward a restructuring proposal that now requires a vote from its creditors to shape the future of both asset recovery and the exchange’s operations.
A Singapore court has instituted a four-month moratorium beginning September 26, 2024, granting WazirX the necessary time to formulate a restructuring strategy. The ultimate fate now hinges on the decision of the creditors. Approval of the plan would notably benefit both the exchange and its creditors, while a rejection could lead to protracted legal disputes and further delays in recovering assets.
Two Options in WazirX’s Restructuring Strategy
Should the creditors endorse the restructuring proposal, the plan will be officially approved by the Singapore court by April 2025. This would enable the platform to resume trading, launch a new decentralized exchange (DEX), and initiate the first recovery of assets.
Efforts to regain assets will be enhanced through profit-sharing to assist creditors in recovering funds, retrieving frozen or stolen assets, and engaging with reliable investors, dubbed “white knight entities,” who can inject financial backing to stabilize WazirX.
Conversely, if the restructuring proposition is turned down, the situation will likely become chaotic. Repayment delays may arise from disputes regarding ownership, and potential liquidation processes could extend until 2030. Creditors might only reclaim a fraction of their investments, possibly in fiat rather than cryptocurrency, leading to missed opportunities during market rallies in the crypto sector. Consequently, the upcoming decision by the creditors will significantly influence WazirX’s trajectory.