WazirX Hack: Zettai Requests Court Approval to Present Restructuring Plan for Creditor Vote

Zettai, the Singapore-registered entity overseeing the WazirX crypto exchange in India, is seeking to engage with its creditors following the July hack that resulted in losses exceeding $230 million (roughly Rs. 1,900 crore). In response to the incident, Zettai began developing a financial restructuring plan under the supervision of the Singapore High Court. In a recent update, Zettai announced it has applied to the court for permission to convene a meeting with its creditors, during which it plans to present the proposed restructuring scheme for their approval.

Details on Restructure Plans

WazirX announced in a press release on Tuesday, December 10, that the proposed scheme was submitted to the court on December 6, 2024.

In its statement, the exchange emphasised that the scheme “prioritizes creditors by providing a structured roadmap for recovery. If the court permits Zettai to convene a meeting of its Scheme Creditors, the proposed plan can be presented for a vote.”

If approved, the scheme could have Zettai initiate initial fund distributions within 10 business days.

“Under the scheme the net available liquid funds which currently represent over 100 percent of the USD value of liabilities as on 18th July 2024, will be disbursed to scheme creditors in the proportionate token balances held in their portfolio, ensuring they benefit from the ongoing crypto bull run,” the exchange explained.

According to its own figures, the total claims against WazirX as of July 18 stood at $546.47 million (roughly Rs. 4,637 crore). As of December 5, the liquid assets under the exchange's control were worth $566,385,206 million (roughly Rs. 4,806 crore).

Under the proposed scheme, WazirX plans to issue recovery tokens to its creditors. Zettai highlighted in its statement that amid the ongoing bull market—where Bitcoin is trading at or above $100,000 (roughly Rs. 84.8 lakh)—creditors have the potential not only to recover their capital but also to realise profits.

Elaborate details of the scheme remain undisclosed for now. WazirX will need approval from at least 75 percent of its creditors for the scheme to proceed. Only after securing this majority will Zettai approach the Singapore High Court for official approval. The voting will take place through a third-party independent platform, with results verified by an external scrutineer.

Revising WazirX's Hack

On July 18, a multi-sig WazirX wallet, managed by Liminal Custody, was hacked for over $230 million. Both WazirX and Liminal have conducted internal investigations and denied any internal lapses that may have contributed to the breach. Users who lost funds in the hack have criticized WazirX for the delay in presenting a restructuring plan.

Back in November, WazirX founder Nischal Shetty stated that he would build India's largest decentralised exchange within the next 12 months, despite facing heavy criticism from the country's crypto community.

Meanwhile, the hacker(s) responsible for the incident have not yet been identified.