Imagine general elections being held in India. The incumbent prime minister asks his corporate “best buddy” to arrange for electronic voting machines (EVMs) and conduct elections for 1.4 billion people. To ensure “transparency”, the EVM results will be vetted by a third party.
Sounds ludicrous ? This is exactly what WazirX cryptocurrency exchange management has planned for its 4.4 million users who will vote for their stranded funds from March 19-28. Wazir’s legal partner Kroll Information Services (KIS), which has been paid out of users’ funds, is now entrusted with conducting voting to get their restructuring scheme approved.
Several users on X (formerly Twitter) have pointed out this apparent conflict of interest in the upcoming voting and wondered whether the entire process is indeed “fair and transparent” as claimed by WazirX management.
Kroll Information Services (KIS) was hired by WazirX, in the wake of Rs 2000 crore cyber hack against the exchange in July 2024. Since the hack. the exchange management has suspended trading, withheld remaining user funds and hired Kroll to streamline their creditors’ claims. Incidentally, KIS has been paid their legal fees, out of Rs 100 crore fund of WazirX users.
Both WazirX and Kroll have together come up with a restructuring plan where all 4.4 million users will get 85% of their portfolio amount back by April or May 2025 and the remaining 15% in the next 2-3 years. WazirX has to get this restructuring scheme approved in Singapore court and for that, it needs to prove majority voted in their favor.
WazirX has claimed that between March 19-28, Kroll will conduct voting for 4.4 million users and after a three day break (no reason given), the voting results will be handed over to third party ‘Alvarez and Marsal (A&M)’ to independently assess them from April 1-8. The final results will be declared on April 11, 2025.
It is imperative to note that the inclusion of a “third party independent assessor (IA)” has been done only after the Singapore court asked WazirX to do to ensure minimum transparency. Prior to that, WazirX had kept aside user funds amounting to Rs 100 crore as part of legal and admin fee, and Kroll has been paid from the same fund.
So, in light of these circumstances, conducting polls for 4.4 million WazirX becomes an obvious conflict of interest for Kroll. The legal firm has been paid out of WazirX users’ pockets to ensure streamlining of restructuring scheme floated by the exchange management, and now it has to conduct voting of users to ensure that the scheme is passed.
If this is not farce, then what is?
Also Read: WazirX legal partner Kroll to hold voting of users from March 19-28
