WazirX parent schedules voting process for scheme of arrangement for March

Zettai, the parent company of embattled crypto exchange WazirX, on Wednesday, said the voting process for the scheme of arrangement for the redistribution of assets is tentatively scheduled between March 19 and March 28 this year. Users of the crypto exchange will have the option to vote in favour or against the proposed scheme on a third-party platform, following which the results will be evaluated by an independent assessor.

 

Legal firm Kroll will be the party platform for the voting process, while Alvarez & Marsal will act as its independent assessor. A majority of the creditors will be required to vote in favour of the scheme for it to be effective. A majority vote representing 75 per cent of the scheme’s creditors by value would be required to approve the scheme. Once approved, the company will make an application to the court for its sanction.

 

 

“Within 10 business days of the scheme becoming effective, the first token distribution under the Scheme to Scheme creditors will take place,” WazirX said in a statement. Earlier this week, the company said it had completed its asset restructuring process, following which a scheme would be put to user vote — nearly seven months after an alleged security breach impacted the platform, leading to a loss of over $230 million. The redistribution of assets will be made in the form of tokens, conditional to its users voting in affirmative to its scheme, the company said.

 

The scheme would represent about 85 per cent of the balances of investors on the crypto exchange, valued as of July 18, 2024, at 1 PM Indian Standard Time (IST). This was the day when the firm was impacted by the alleged breach. It added that subsequent distributions would happen over the next three years from illiquid assets such as stolen tokens and those from shared profits generated during future operations. Asset restructuring refers to the reallocation and reorganisation of virtual digital assets to the impacted users or investors.

 

The platform has 4.3 million creditors in total. Creditors are the investors and users affected by the cyberattack. In December, Zettai 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 vote, subject to the court’s approval.

 

According to 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. WazirX had applied for restructuring at a Singapore court on August 23. The company, facing liabilities amounting to $546.5 million, had a user base of over 16 million investors.