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WRX crashes 7% weekly as the Singapore court delays approval of WazirX’s repayment plan again.
User withdrawals remain frozen, pending further court review after May 23; next verdict expected June 6.
Investor confidence drops amid ongoing legal delays
WRX, the native token of crypto exchange WazirX, experienced a major fall, losing almost 7% over the week and 1.2% in the last 24 hours. At the time of writing, WRX is around $0.02861, with a market cap of $10.92 million, while the crypto itself has dropped to 1088th place in global rankings.
The recent price drop directly corresponds to several significant developments in the WazirX legal proceedings. On May 13, in the Singapore High Court, the application for the exchange's restructuring and repayment (SUM 940) was heard, aimed at resuming withdrawals for users after months of sitting inactive following the 2024 security breach.
However, the court refused to sanction the application immediately and instead provided directions for the filing of further affidavits by May 23. Additionally, the court extended the moratorium in place until June 6, which would shield the exchange from any legal actions till then.
This has only delayed the confidence of investors and users. WazirX's repayment plan had been considered a way to regain credibility for the platform and release frozen user funds. Now, all the attention turns towards the exchange's submission to be made on May 23. If the court finds satisfaction with the documents, withdrawals could commence post-June 6. Failure to accept them will only further push WRX tokens into deeper agony.
Also Read: Who stole WazirX's crypto?
On 18 July 2024, WazirX was hit by a massive hack, resulting in losses of $234.9 million. The breach was caused by the Lazarus Group, an entity linked to North Korea; the perpetrators first found vulnerabilities in the exchange's multi-sig wallet system. Following the attack, trading activities and withdrawals halted, and over half the users’ funds were frozen. Parent company Zettai PTE LTD started the restructuring process to compensate the users affected by Recovery Tokens (RTs) that represent the missing assets.
Over 93.4% of the creditors supposedly voted in favor of the plan earlier this year, with distributions expected to commence shortly after the court's approval; however, the court's repeated postponements have injected some doubt as to the timeline and feasibility of said repayments.
Also Read: WazirX crypto attack: North Korean group Lazarus behind $235 million theft
The latest developments have left a sour taste for WRX investors. User forums and social platforms are flooded with criticism regarding the platform’s transparency. Many have expressed frustration over the lack of clear timelines and the disabling of comment sections on official WazirX social media handles.
Investor sentiment is deteriorating, and unless the upcoming May 23 submission meets legal standards, WRX could face further downside pressure. The market isn't responding well to the extended delay, and the prolonged moratorium only adds to the unease.
WazirX has reiterated its intent to honor user obligations and is reportedly working closely with legal counsel to comply with court requirements. The exchange’s future and the fate of WRX now hinge on the Singapore court’s June 6 decision. Should it greenlight the repayment process, WazirX could begin rebuilding trust. However, any further delays or rejections could lead to more selloffs, further denting WRX's valuation.
