WazirX’s request for a six-month extension for liability restructuring comes after CoinSwitch planned to sue the Indian exchange.
Indian cryptocurrency exchange WazirX lost $234 million in July after a security breach. While several efforts to recover the stolen funds have not been successful, WazirX has filed with the Singapore High Court for a six-month extension period to restructure its liabilities following the recent hack. CoinSwitch exchange has revealed plans to sue WazirX for holding over $9 million of its funds deposited on the exchange before the hack.
WazirX Files for a Moratorium
A moratorium is a legal authorization to temporarily halt or suspend a payment or obligation within a specific period. An automatic 30-day moratorium is effective from the day of filing while the applicant awaits feedback from the court about a hearing for the application.
WazirX has taken the next step in its fund’s recovery mission by filing a moratorium with the High Court of Singapore to “facilitate its intention to restructure its liabilities under a scheme of arrangements.” The exchange has forwarded copies of the application and supporting affidavit to its users. The court has not set a date for the hearing, so WazirX is relieved for 30 days.
WazirX Partners With Zettai
As announced in a press release on Wednesday, WazirX has partnered with cybersecurity solution firm Zettai Pte to address users’ crypto balances on the platform and speed up funds recovery. At the same time, it takes “breathing space” to restructure its liabilities under a “Scheme.”
If approved by the creditors and sanctioned by the Singapore court, a Scheme would be legally binding on the involved firms, including Zettai. It would allow WazirX to distribute tokens equally and quickly to its users.
According to WazirX, the “impact from the cyberattack will be allocated pro-rata across users who rank equally with each other as unsecured creditors.” At the same time, a fair share of available token assets will be distributed to all users.
Moreover, WazirX revealed that Zettai will need at least six months to examine the restructuring plans and work with the relevant stakeholders. It also promised to share timely updates with the community and receive feedback from stakeholders and creditors.
CoinSwitch Threatens to Sue WazirX
WazirX’s rival exchange, CoinSwitch, has claimed that WazirX holds about $9.6 million of its funds deposited into the exchange. However, CoinSwitch has not received any feedback on how it will retrieve the funds after the hack. Instead, its recent announcement about how a full recovery will happen is unclear.
CoinSwitch also claimed to have been in regular contact with WazirX since the incident and intends to take every necessary step, including legal action, to recover its funds from the hacked exchange if needed.