The Singapore High Court has allowed the parent company of troubled crypto exchange WazirX to convene a meeting to present a scheme of arrangement for recovering lost funds for its users.
The creditors’ meeting will be held online, with voting on the proposed scheme conducted electronically, the company said in a statement. It added that creditors will be notified with detailed instructions for the process.
The key components of the approved scheme include debt restructuring, token distribution, the launch of a decentralised exchange (DEX), and a profit-sharing structure.
Under the scheme, creditors will receive an initial distribution of liquid assets within 10 business days of the scheme’s activation. They will receive recovery tokens, which can be redeemed as part of the firm’s recovery efforts. Approval of the scheme requires a majority vote representing 75 per cent of creditors by value. Once approved, the company will seek court sanction. The platform currently has 4.3 million creditors.
“The court also noted that while some creditors have voiced objections to Zettai’s application, there may also be a silent majority of users who support the application but have chosen to remain passive in the process,” the company said.
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The recovery plan follows a July security breach on the platform that resulted in a loss of over $230 million.
Creditors include investors and users impacted by the cyberattack.
“I thank the court for allowing us to convene the scheme meeting and acknowledging our efforts. We are leaving no stone unturned to facilitate recovery for users and appeal to them to vote in favor of the scheme,” said Nischal Shetty, founder of WazirX.
Zettai, WazirX’s parent firm, filed the application with the Singapore High Court last month.
In September, the court granted the Indian cryptocurrency exchange a four-month moratorium, allowing it to restructure its business without legal proceedings during that period.