WazirX Finalizes Asset Rebalancing, Opens Door for Creditor Disputes and Claims

WazirX has declared that its asset rebalancing process has been finalized. On February 11, the struggling exchange notified users impacted by the hack in July 2024 that they can now verify their potential compensation based on their balances recorded on July 18, 2024. To assist with this, WazirX has released a Preliminary Creditor List on its webpage detailing the claimable amounts in US dollars.

WazirX must secure approval from 75 percent of its creditors for its suggested restructuring plan. The Singapore High Court approved this Scheme of Arrangement in January for creditor presentation. Although WazirX hasn’t confirmed the start date for the voting process, a spokesperson informed Gadgets 360 that it could initiate at the end of February or early March.

WazirX Provides Update on Rebalanced Net Liquid Platform Assets and Dispute Protocols

On February 10, WazirX announced that it had restructured its Net Liquid Platform Assets (NLPA) to align asset denominations with its obligations and resources.

To improve transparency, the exchange introduced three additional tabs on its mobile app and website, enabling users to access their rebalanced portfolio, balances as of July 18, 2024, and the preliminary creditor list. Co-founder Nischal Shetty shared an image of these developments on X, keeping the WazirX community updated.

This initiative will grant WazirX creditors access to important information, including the USD valuation of their calculated shares in the rebalanced NLPAs, their effective balance recovery percentages, and unique IDs, as indicated by the exchange in a blog post. Furthermore, users will also be able to check the current value and token distribution of their share of the NLPAs, in addition to the specifics of their crypto deposits via the new tabs on the WazirX app and website.

The exchange will permit users to examine claims made under their names and, if warranted, challenge the assigned amounts. Creditors can file disputes related to their assets using the Claim Dispute Form from February 10 to February 19.

“Users can present their claims for disputes, furnish valid proof, and have their applications assessed by an independent reviewer. If accepted, the amendments will be reflected in their portfolio, ensuring precision and fairness in the restructuring process,” the exchange stated in a separate post.

The financial restructuring firm Kroll, based in Singapore, will manage the forms and responses from creditors, finalizing any required modifications.

Recent Updates on WazirX’s Restructuring Process

Recently, WazirX announced that its plan for compensating creditors will involve the issuance of recovery tokens (RTs) and recovery distributions via an RT purchase mechanism. The exchange also aims to strategically relaunch its platform with upgraded functionalities.

Moreover, WazirX plans to implement a new business model focusing on a decentralized exchange (DEX) while rejuvenating its platform to enhance recovery percentages for creditors. This will be accomplished through profit sharing, recovering assets from illiquid wallets, and forming partnerships with white knights.

However, if the proposed scheme is declined and liquidation is required, the process for recovering and redistributing funds to creditors might continue until the end of 2030.

“Within 10 business days following the effective date of the scheme, the platform will restart, although dependent on court timelines. This distribution, which will be allocated in tokens, and made accessible once users vote in favor of the scheme, will represent approximately 85 percent of creditors’ balances valued as of July 18, 2024, 1 PM IST,” the exchange remarked.

On July 18, 2024, a multi-signature wallet belonging to WazirX, supervised by Liminal Custody, was compromised, leading to losses exceeding $230 million (around Rs. 1,900 crore). Both Liminal and WazirX have denied any breach of their respective networks.