Embattled crypto exchange WazirX received a lifeline Tuesday when a Singapore court granted the company‘s request to present additional arguments for its restructuring plan, extending a crucial moratorium that keeps its recovery efforts alive.
The Singapore High Court‘s decision comes after it initially declined to approve WazirX‘s proposed restructuring plan in early June. The move dealt a significant blow to the India-serving exchange, which has been struggling to resume operations following a massive $234.9 million crypto heist that occurred last July.
"The Singapore Court has granted our request to present further arguments in our application for the Court‘s sanction of the proposed Scheme of Arrangement," the exchange announced in a tweet.
In a statement shared with Decrypt, a WazirX spokesperson said that the exchange is, "fully committed to seeing this Scheme of Arrangement through." They added that, "The Court’s decision to hear further arguments is a positive step, and we’ll continue to engage with complete focus and determination — always with our community’s best interests at heart."
The proceedings are in Singapore because Zettai, WazirX’s Singapore-based operator, oversees its crypto operations.
The court ruling holds enormous stakes for the 6.6 million WazirX users who have been unable to access their funds since the platform halted trading after the hack, which authorities have linked to North Korea‘s state-sponsored hackers.
The exchange‘s ability to restructure directly impacts whether users will be able to recover their frozen crypto assets through the company‘s proposed recovery token system.
Breathing room
The extended moratorium provides WazirX with breathing room as it prepares additional legal arguments to convince the court of its restructuring plan‘s viability.
The original moratorium, granted on June 6, had protected the company from creditor actions while it sought court approval for its recovery strategy.
Following the court‘s initial rejection, WazirX revealed in redacted legal documents sent to users that Zettai plans to relocate operations to Panama through a newly incorporated subsidiary called Zensui Corporation, established on March 10.
The move came as Singapore‘s central bank set a June 30 deadline for local crypto service providers to cease offering digital token services to overseas markets, adding pressure to WazirX‘s restructuring efforts.
WazirX‘s parent company, Zettai, has finalized agreements to transfer the platform‘s crypto-related services to Zensui, with the transition expected to be completed within two to three business days once executed.
The Panama-based entity will also handle the issuance of recovery tokens tied to the exchange‘s post-hack compensation scheme.
The recovery tokens function as on-chain IOUs—essentially digital "I owe you" certificates—representing users‘ outstanding balances, designed to track claims not covered by initial distributions.
In crypto exchanges, IOUs serve as formal acknowledgments of debt when platforms cannot immediately return user funds.
More delays for WazirX users
More than 93 of voting creditors approved the restructuring plan in April, with WazirX promising the tokens could yield 75 to 80 of users‘ account balances at the time of the hack.
“WazirX is in a holding pattern, caught in a prolonged legal process in Singapore following the massive hack,” Dhrupad Das, Web3 lawyer and founding partner at Panda Law, told Decrypt.
The court extension means “more delays” for users, with much of the recovery hinging on “speculative” tokens and WazirX’s “planned decentralized exchange,” while the Binance dispute and Panama move only deepen the “uncertainty,” Das said.
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