A Singapore High Court, on Thursday morning, approved the WazirX moratorium application with certain conditions, giving it four months of protection from any legal cases, during which the management is expected to roll out a “restructuring process” in the wake of Rs 2000 crore cyber hack.
The restructuring process implies a proposed 55% return of funds to each WazirX user within the next 4-6 months in a socialistic loss-sharing policy. According to WazirX management, every user will be entitled to receive their 55% funds in the next 4-6 months while there is no guarantee on the remaining 45% funds.
A single bench led by judicial commissioner Kristy Tan approved the moratorium application filed by WazirX co-founder Nischal Shetty vis-a-vis Zettai Pte Ltd- the Singapore based parent entity of WazirX. As the WazirX news today broke, several users were confused whether it’s a complete win for Nischal or there is some hope left for them in the judicial process.
However, in the court order, Judge Kristy Tan also put four conditions to Shetty to fulfill in the next six weeks.
- Publish Wallet Addresses of WazirX through court affidavit.
- Public Book of Accounts of WazirX through court affidavit.
- Respond to users’ queries and grievances.
- Run a poll for seeking support of restructuring process on an independent platform.
The court has also asked Shetty to send the written order by judicial commissioner Kristy Tan via email to all WazirX users. The exchange management also released a statement regarding the moratorium decision on Thursday afternoon.
But is the moratorium application approval by Singapore High Court judge a total win-win for Nischal Shetty and exchange management? Are the 4.4 million users of WazirX users at complete loss? Let’s try and understand what is the next course of action for the exchange management, with respect to the court’s condition approval to their moratorium application.
What’s Next for WazirX Users?
Nischal Shetty has filed a total of four affidavits till now in the Singapore High Court for the moratorium application. As explained in the second affidavit, Shetty had applied on August 27, more than a month after the exchange was hacked on July 18. As per the judicial process in Singapore, the judge had 30 days to grant the application or reject it.
Next steps as proposed by WazirX management after moratorium is approved:
- Step 1: Zettai (WazirX) will again move the court to seek for a meeting of all creditors to present to them the restructuring scheme and seek their approval.
- Step 2: If Court approves and gives permission, then a creditors’ meeting will be called by WazirX 21 days later. It is highly likely that the meeting will be virtual since more than 95% WazirX users are in India.
- Step 3: The creditors’ meeting will constitute a voting process, in which the criteria for restructuring scheme to pass is scoring above 50% votes and 75% or more in value of funds held by creditors.
- Step 4: If the creditors present for voting approves the restructuring scheme, then WazirX will again approach the Singapore High Court to seek their final stamp. This can take another 30 days’ time.
- Step 5: The Singapore High Court finally approves the restructuring process and 55% amount is immediately dispersed by management to each WazirX user.
The WazirX management has further claimed that if, at any step, their plan of action is not approved by the creditors or the court, then the users will have to wait for the ongoing ownership dispute between WazirX and Binance to get resolved.
However, users must also note that there are total 4.4 million active users of WazirX but the exchange management will consider the votes of only those present during the voting process as counted. For example, if only 1000 users attend the online voting, then WazirX needs only above 500 yes votes to get their restructuring scheme sanctioned by court.
The recent court order by Singapore High Court is not a complete win-win for Nischal Shetty, as the judge has put four major conditions demanding transparency and accountability from the exchange.
Also Read: Hopeless WazirX Users Now Turn To Singapore Chief Justice
