WazirX parent seeks court approval for creditors' meeting, recovery scheme

Zettai, the parent firm of embattled crypto exchange WazirX, has filed an application with the Singapore High Court seeking permission to convene a meeting of its creditors.

 

The meeting would enable the company to present a scheme of arrangement for the recovery of lost funds to its creditors and bring it to a vote, subject to the court’s approval.

 

As part of the scheme of arrangement, creditors will receive an initial distribution of the available liquid assets within 10 business days of the scheme becoming effective. Creditors will also receive recovery tokens enabling them to redeem these as part of the company’s recovery efforts.

 

Zettai plans to launch a new decentralised exchange (DEX), stating that profits from it would contribute to the recovery pool.

 

“Under the scheme, the net available liquid funds (after accounting for, among others, professional fees and other operational costs), which currently represent over 100 per cent of the US dollar value of liabilities as of July 18, 2024, will be disbursed to scheme creditors in proportion to the token balances held in their portfolio, ensuring they benefit from the ongoing crypto bull run,” the company said in a release.

 

A majority vote representing 75 per cent of the scheme creditors by value would be required to approve the scheme. Once approved, the company will make an application to the court for its sanction.

 

The platform has 4.3 million creditors in total.

 

The recovery plan comes after the company lost over $230 million in a security breach on the platform in July. Creditors are the investors and users affected by the cyberattack.

 

In September, the Singapore court granted a four-month moratorium to the company, a period during which the embattled firm is expected to restructure its business without worrying about legal proceedings.

 

The creditor base is skewed towards low-value claims, WazirX said in October.

 

Around 87 per cent of the users on the platform represent less than 8 per cent of the total claims by value. In a blog post, the crypto exchange said that the sum of all the claims in these tranches amounts to $546.5 million.