WazirX Restructuring Plan Approved by Singapore High Court
In a significant development for the beleaguered cryptocurrency exchange WazirX, the Singapore High Court has granted approval for its restructuring plan, signaling a potential turning point for the company. Nischal Shetty, the co-founder and CEO of WazirX, took to X on October 13 to share the news, which comes after a lengthy and tumultuous legal battle. Shetty expressed gratitude to supporters during this challenging period for the exchange, stating:
“Thank you to everyone who supported this difficult phase of WazirX. The Singapore High Court has approved the scheme.”
Background and Legal Challenges
This recent ruling is a notable reversal from earlier in September when the court rejected a similar proposal over concerns regarding fairness and feasibility. That decision had sparked backlash from WazirX’s creditors, who accused company leaders of utilizing legal maneuvers to stall repayments and obscure financial issues.
Impact of Cyberattack
WazirX’s troubles escalated after a cyberattack in July 2024, attributed to North Korea’s notorious Lazarus Group, which caused the exchange to lose around $230 million. This attack not only severely diminished its assets but also left thousands of users without access to their funds. In response to this crisis, the exchange has attempted several restructuring initiatives, with the latest version garnering strong backing from creditors. The court’s approval now establishes a legal pathway for WazirX to proceed with this plan.
Future Prospects
Although WazirX has not specified exact timelines for its restructuring, it has indicated that trading activities could resume within ten business days of the plan’s implementation. This could pave the way for user repayments and other recovery initiatives to commence in the near future.
Ongoing Legal Scrutiny
However, challenges loom for the exchange, as it is still entangled in legal scrutiny in India, particularly concerning its historical affiliations with Binance. This complex situation complicates the recovery efforts, as creditors are demanding a Special Investigation Team to look into the 2024 hacking incident for accountability measures.
While the recent court approval is a positive stride for WazirX, the ultimate realization of its repayment commitments and ability to regain trust from its user base remains uncertain.
