Singapore HC Rejects WazirX Restructuring Plan

WazirX took a major hit after the Singapore High Court rejected a proposed restructuring plan submitted by its parent entity Zettai Pte Ltd.

The company submitted the plan in November last year after it suffered a $235 Mn cyber theft in July, which affected nearly 4.4 Mn Indian users.

“The Honourable Singapore High Court issued an order declining to approve our proposed restructuring plan. While this outcome was not what we anticipated, we respect the Court’s decision and remain fully committed to complying with all legal and regulatory processes,” WazirX said in an X post.

The company added that its primary focus remains to begin distributions as soon as possible and that it is evaluating all available legal options to appeal the decision.

“Today’s decision does not impact the NLPA assets, which remain safe,” WazirX noted.

While the company did not elaborate on the reason for the rejection, a Business Standard report suggested that the court’s decision was prompted by WazirX’s failure to disclose details about its Panama-based entity during the restructuring process.

WazirX has incorporated Zensui Corporation in Panama to continue its crypto operations without requiring a Singapore licence, as the city-state is set to enforce the Financial Services and Markets (FSM) Act, 2022 from June 30.

Another ET report said that the court quashed the plea because the scheme is not valid in India, where Zettai does not operate as a registered entity.

It is worth noting that the court in January approved the process for creditor voting and granted protection from liquidation to WazirX. 

The plan, developed in consultation with creditors, proposed distributing the remaining token assets to users on a pro-rata basis in cryptocurrency rather than fiat.

As part of this recovery effort, Zettai aims to release $284 Mn (covering 52% of creditor claims) in liquid assets. The remaining 48% will be addressed through the issuance of recovery tokens to users.

Moreover, to refund RT buybacks, WazirX intends to relaunch its platform by February 2025 and introduce a decentralised exchange (DEX), crypto staking, an OTC desk, and futures trading.

A majority of creditors approved the restructuring scheme in April. Following this, the company required final clearance from the Singapore High Court to implement the plan and restart operations.