WazirX has initiated a comprehensive restructuring process under Singapore’s legal framework. This strategic decision follows a cyberattack the platform suffered, perpetrated by North Korean hackers in July 2024, targeting its crypto-to-crypto assets. Following this, WazirX opted for restructuring in Singapore, under its entity Zettai which handles the crypto to crypto transactions.Given that these operations were managed by its parent company, Zettai Pte Ltd, registered in Singapore, WazirX has opted for restructuring within the same jurisdiction.
A Legal Framework for Recovery
The restructuring is being carried out through a Scheme of Arrangement, a corporate rescue mechanism under Singapore’s Insolvency, Restructuring, and Dissolution Act 2018 (IRDA). This legal provision allows companies to propose structured debt resolutions that offer higher recovery prospects than liquidation.
User Impact: Swift & Transparent Recovery
The primary objective of the restructuring is to ensure a fair and expedited asset recovery process for WazirX users. Following the Singapore High Court’s approval for a scheme meeting, users are expected to recover 85% of their investments by April 2025, should they support the plan. Unlike traditional liquidation, which can take years with uncertain outcomes, this approach ensures equal treatment of all users as contingent unsecured creditors under Zettai.
Why Singapore?
Singapore’s robust regulatory framework makes it an ideal jurisdiction for managing cryptocurrency-related legal proceedings. Zettai’s scheme application was approved by the High Court of Singapore last month based on its efficiency and timely fund distribution to users, and better outcomes as compared to a liquidation. WazirX has also released the rebalanced tokens for each user to help them understand how much they are owed based on their fund balances on the day of the cyber attack. This step has been a positive move towards transparency in their restructuring process.The Companies Act (1967) provides a structured and transparent legal foundation, ensuring efficient dispute resolution. Furthermore, an unresolved ownership dispute with Binance adds complexity to the situation. Rather than waiting for its resolution, Zettai has taken proactive steps to safeguard user assets through Singapore’s well-established legal system.
If the Scheme is effective with majority users voting YES, it will be one of the fastest restructuring to take place in the crypto world and could set a precedent for speedy resolutions and user friendly outcomes for all crypto projects going forward. WazirX has also released the rebalanced tokens for users to help them understand how much they are owed based on their fund balances on the day of the cyber attack. This step has been a positive move towards transparency in their restructuring process.
How this whole episode plays out could serve as an interesting benchmark for the crypto industry, demonstrating how regulatory frameworks can facilitate recovery processes while prioritizing user interests.
