WazirX files moratorium application with Singapore court under insolvency act, seeks to restructure liabilities

Zettai Pte Ltd, the holding company of the cryptocurrency exchange WazirX, posted on X (formerly Twitter) on Wednesday, August 28, that it had filed an application with the High Court of Singapore under Section 64 of the Insolvency, Restructuring and Dissolution Act 2018.

The crypto exchange aims to restructure its liabilities under a scheme of arrangement, according to its statement. This move comes after the company lost $230 million in the form of crypto assets after a hacking attack on July 18, 2024.

The moratorium period will give the holding company some “breathing space” while it proceeds with the restructuring. WazirX said the period will give it time to develop a restructuring plan that “represents the most efficient way to address users’ cryptocurrency balances on the platform and facilitate recovery for users”.

The company will get an automatic moratorium period of 30 days from the filing of the application, and the High Court of Singapore will decide whether or not to grant the request of the company.

WazirX said the hearing has not been scheduled, and it will update about it once it receives more information from the Singapore legal body.

“Zettai has taken the initiative to concurrently facilitate a solution for users of the platform as contingent unsecured creditors of Zettai as quickly and effectively as possible,” said WazirX.

The financial impact of the cyberattack will be allocated on a pro-rata basis to the users who rank equally with each other and unsecured creditors.

“We anticipate that under a planned restructuring, the impact from the cyberattack will be allocated pro-rata across users who rank equally with each other as unsecured creditors, and users will receive a share of available token assets associated with the Platform proportionate to their share of all users’ unsecured claims for their account balances,” it noted.

If the application request is unfavoured, the company will look into resolving the crypto balances through alternative routes that may involve undefined risks and timelines. “A restructuring may offer a more flexible and tailored approach compared to other potential options,” WazirX pointed out.