Nischal Shetty, founder of Indian cryptocurrency exchange WazirX, announced the formation of a creditors committee in response to the devastating $230 million hack on the platform. The announcement follows a recent ruling by Singapore’s High Court, which granted the exchange a four-month moratorium to devise a restructuring plan to reimburse affected customers.
WazirX Founder Forms Creditor Committee
About 45% of user funds were stolen in a hack on July 18, and the platform has been under intense scrutiny since then. Moreover, users of cryptocurrency exchanges are losing their peace as their assets are frozen and full recovery becomes almost impossible.
Shetty, therefore, through an official statement, urged the WazirX community to unite and actively participate in the recovery process. He said: “We are forming a committee of creditors and you should be a part of that committee. Our goal is to listen to all voices within the WazirX family and bring together diverse perspectives to create solutions that benefit us all.”
His message emphasized the need for collective action and a united front on the platform issue. Shetty therefore added, “The path to a solution lies in unity, moving forward together, hand in hand, based on the shared goal of fair and speedy results for all.”
We are forming a creditors’ committee and you should be part of that committee.
Our goal is to listen to all voices within the WazirX family and bring together diverse perspectives to create solutions that benefit us all.
We cannot face this challenge alone…
— Nischal (Shardeum) 🔼 (@NischalShetty) September 30, 2024
The move comes after a stay by the Singapore High Court granted on September 26 provided temporary relief to the exchange. The moratorium placed repayment obligations to stakeholders on hold while the platform prepared its restructuring plan.
WazirX originally applied for a six-month stay under the Bankruptcy, Restructuring and Dissolution Act, but the court reduced the request period to four months. The court’s ruling imposes several conditions that exchanges must meet. This includes greater transparency and communication with users.
grace conditions
Among the conditions stipulated by the court, WazirX must disclose the wallet address through a court affidavit within three weeks of the stay order. The statement must detail both the hacked wallet and the remaining wallets managed by the exchange.
Additionally, platforms must respond to users’ queries through court-ordered chat rooms within the same three weeks. This level of disclosure is intended to provide transparency about the current state of platform assets.
In addition to wallet disclosure, WazirX is required to submit up-to-date management accounts and balance sheets via affidavit within six weeks. Additionally, the voting process for future restructuring plans will be overseen by independent parties to ensure a fair and transparent process for creditors.
The creditors’ committee, currently being formed, will play an important role in concretizing the restructuring efforts. Shetty’s appeal to the community is part of efforts to restore trust in the platform following the hack.
“We cannot face this challenge alone, and we will not succeed if we remain divided,” Shetty wrote. He also said, “Let us work together to resolve this matter in the best interest of the WazirX family. “Your support means everything.”
If more time is needed to complete the restructuring process, the exchange must file an extension notice with the court three weeks before the grace period expires. The coming months will be critical as WazirX works to restore operations, ensure the safety of remaining user funds, and rebuild trust among users.
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