WazirX has filed for a moratorium amidst its ongoing restructuring process following the major hack, which resulted in the theft of digital assets worth ₹2,000 crore.
This move drew attention to a significant development as the fund set aside for the restructuring process increased from ₹100 crore to ₹250 crore. This, raised eyebrows among users, who had questions as to whether additional user assets had been tapped into or not.
Through X, WazirX on their end tried to simplify the ongoing changes in detail to provide transparency and full understanding of the restructuring process.
What Really Happened?
WazirX clarified that the ₹250 crore ($30 million) restructuring fund, known as “Cost Reserves,” is an extension of the initial ₹100 crore ($12 million) fund set aside for the restructuring process. The additional ₹150 crore ($18 million) was not taken directly from users funds. Wazirx asserts the funds were raised through strategic Treasury management as the team kept the Rs 100 cr in a certain set of tokens, which are currently worth more from their August 2024 price.
This approach ensured no further tokens were reserved, securing the necessary funds to support a successful restructuring without impacting existing assets.
Why Does This Matter?
The ₹250 crore fund is essential for WazirX’s recovery and restructuring. Initially, ₹100 crore was set aside to cover costs like operations and professional fees.
However, an extra ₹150 crore was needed to support the restructuring process over the next three years. This money is meant to help restart the WazirX platform, launch a new decentralized exchange (DEX), keep the business running, and recover lost or stolen assets to benefit creditors.
While WazirX made it clear that this fund is crucial for improving creditor recoveries. They managed to secure the extra funds through smart financial management without using additional assets, ensuring the recovery process stays fair and effective.
There is a concern among creditors, what if WazirX had incured loss with the 100CR, who would have have to bear the expanse in that senario. Luckily thats not the case creditors have to concern and now they have to wonder will they have a share in profit or not.
Profit Sharing with Creditors
WazirX explained how it will handle profits during the recovery. Until the ₹250 crore fund is fully recovered and shared with creditors, 100% of the company’s profits will go to them. This ensures creditors are the top priority during the restructuring.
After the fund is fully recovered, WazirX will still share 50% of its profits with creditors for the next three years or until all Recovery Tokens are bought back.
This approach ensures that creditors benefit without further compromising user assets, positioning WazirX for long-term recovery.
Also Read: WazirX Seeks Creditor Meeting Following Singapore Court Approval
