WazirX exchange management’s plan to introduce a secret 10 member committee of creditors (CoC) to represent its 4.4 million users, has backfired as only four members were present in its first online meet, with few even suggesting they are uncomfortable representing all users. CoC’s role will be crucial in WazirX getting their funds redistribution scheme approved by Singapore Court post the Rs 2000 crore hack.
On Friday, WazirX management released the Minutes of Meeting held between exchange, Kroll legal firm and CoC members held on October 15 online via video call. According to WazirX, only four members of anonymous CoC were present in the meet and a few members also raised concerns that they were uncomfortable representing all 4.4 million users.
Although the suggestions made by CoC to WazirX will be non-obligatory, the management is expected to present the CoC to Singapore Court as a step towards transparency to get their redistribution scheme approved. WazirX had created the anonymous CoC from a pool of 43,000 users of WazirX who were chosen at random from 4.4 million users.
According to WazirX management, the identity of CoC members has been keep secret for “security reasons” as they had also refused to allow users to nominate the committee members. The management’s plan of action was met with protests from several users and influencers who questioned their transparency model. Several users also questioned whether the 10 members chosen at random would be technically knowledgeable enough to represent the claims of 4.4 million users.
WazirX management also claimed that the four users who attended the meeting had several recommendations to make and after the meet ended a few points were agreed upon by all parties.
WazirX has been struggling with a 45% asset deficit caused by the July 18 cyber-attack, pushing the company to seek a restructuring plan under a Scheme of Arrangement in Singapore. The Singapore Court granted a four-month moratorium, effective until January 26, 2025, to allow WazirX to address this asset deficit and explore ways to improve user recoveries.
WazirX has touted the COC as a way to gain input from unsecured creditors and create a fair restructuring plan. However, users are not entirely convinced. COC members, who are expected to act as a “sounding board” for creditor interests, can offer consultative input but lack voting power to enforce their recommendations.
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