WazirX, one of India's largest cryptocurrency exchanges, is encouraging creditors to confirm its restructuring plan soon. The platform urges creditors to make quick decisions, as a failure to do so may leave them waiting until 2030 to see a dollar back from the nearly US$235 million hack.
The High Court of Singapore endorsed the restructuring plan on Jan. 23, 2025. It stated that a structured repayment process would benefit users better than liquidation.
Under the proposed plan, WazirX estimated that creditors could recover up to 80% of their balances. The company intends to introduce recovery tokens, representing creditor claims, allowing them to benefit from both recovered assets and future profits of the platform. The creditors of WazirX now face a choice between early repayment or significant delays.
A voting process will be conducted over the next three months, where creditors will decide on the scheme. If the plan is approved, net liquid assets will be distributed within 10 days of finalizing the vote.
On Feb 4, 2025, the platform set out two potential outcomes for the creditors impacted by the 2024 WazirX hack, which landed it in the current predicament.
In case the restructuring plan is considered approved with 75% votes in favor, WazirX may start repaying from April 2025. Simultaneously, the company will also resume operating its exchange and will launch a completely new DEX business. Profit-sharing mechanisms and asset recovery would be used to repay creditors.
However, WazirX warned that creditors could experience unclear and extended timelines if the repayment scheme is rejected. Thus, possibly waiting up to five more years before receiving their assets. The exchange highlighted that liquidation before resolving ownership disputes could result in lower-value fiat repayments, as liquidation costs would reduce the amount distributed.
“As fiat is distributed, market price-driven upside following distributions is unlikely," said WazirX in a post on X (formerly known as Twitter). It also warned creditors that they may end up missing near-term bull runs due to the delays:
WazirX's restructuring plan has become its best hope for recovering and repaying its users. If the creditors reject this scheme, their delay will likely be maximized, and chances of losses are higher because legal proceedings may continue.
The voting day will decide whether WazirX can move ahead on its recovery roadmap or if the creditors have to wait for a long time for their funds. The date for voting has not yet been officially announced, but one may expect it to take place within the coming weeks.