WazirX Granted Extended Court Deadline Amid Restructuring Battle
Key Points
- Singapore court grants WazirX additional time to present arguments for its restructuring plan.
- Extended moratorium prevents creditor action as WazirX prepares to shift operations to Panama.
- Over 93% of creditors initially backed the recovery plan aimed at reviving the exchange.
The embattled Indian crypto exchange WazirX has received temporary relief after receiving an extension for legal arguments related to its restructuring plan, following an initial rejection by Singapore courts.
The Singapore High Court’s decision on Tuesday came after the company’s initial proposal was declined in early June. For WazirX, the denial dealt a significant setback, coming just months after the major $234.9 million crypto heist in July.
“The Singapore Court has granted our request to present further arguments in our application for the Court’s sanction of the proposed Scheme of Arrangement,” the exchange announced.
A WazirX spokesperson reiterated the exchange’s commitment to the plan, stating, “Our primary focus remains on successfully implementing this restructuring and ensuring the long-term viability of WazirX.”. They added, “The Court’s decision is a positive development, allowing us to continue our focus on resolving this matter for the benefit of our community.” (Decrypt)
Breathing Room for Recovery Efforts
The extended moratorium provides WazirX breathing room as it prepares additional legal arguments to demonstrate the viability of its restructuring plan. The original order granted in June shielded the exchange from creditor actions while it sought court approval.
Following the initial rejection, it was revealed Zettai, WazirX’s Singapore-based operator responsible for its crypto activities, plans to relocate operations to Panama via a newly formed entity, Zensui Corporation.
This move is particularly timely, as Singapore’s central bank recently set a June 30 deadline for local providers to stop offering crypto services to overseas markets.
WazirX’s restructuring hinges partly on establishing Zensui in Panama to issue “recovery tokens”— essentially digital IOUs— to help users recover assets lost during the hack and subsequent operational halt.
Uncertainty Persists for WazirX Users
Despite the creditor approval secured earlier, legal delays mean more uncertainty for the 6.6 million affected users who remain unable to access their frozen funds since trading suspended after the hack.
Dhrupad Das, Web3 lawyer and founding partner at Panda Law told Decrypt: “WazirX is now in a holding pattern, caught in a prolonged legal process… The extension likely means more delays. Recovery remains heavily dependent on speculative recovery tokens and the exchange’s planned decentralization.”
Das added that the Panama move and ongoing Binance dispute deepen the “prolonged uncertainty” facing users.
