WazirX Secures Overwhelming Support from Creditors for Asset Recovery Plan
In a significant development, the cryptocurrency exchange WazirX has garnered an impressive 93.1% approval rate from its creditors for the proposed Scheme of Arrangement. This initiative is a crucial step towards facilitating the recovery of assets for victims of the notorious $230 million hack that occurred in July.
The voting process took place on the Kroll Issuer Services platform between March 19 and March 28, involving a total of over 141,000 creditors with approved claims amounting to $195.65 million. Among these, 131,659 creditors, representing $184.99 million, voted in favor of the scheme. This translates to a remarkable 93.1% by count and 94.6% by value, surpassing the stipulations set forth by Singapore’s Companies Act, where WazirX’s parent company, Zettai, is registered. The Act requires both a majority in count and a minimum of 75% in value for approval.
Had the scheme not received approval, the situation would have escalated towards liquidation under Singapore’s Companies Act, a scenario that could have resulted in significantly lower asset recovery for creditors, with projections extending to an estimated timeline of 2030, as indicated by WazirX in a previous statement in February.
With the voting results now confirmed, Zettai is poised to approach the Singapore Court for sanctioning the scheme. If the court grants approval, the plan would initiate an initial payout to creditors within 10 business days, followed by a phased resumption of both withdrawals and trading activities, contingent on regulatory compliance.
Integral to the refund strategy is the launch of a decentralized exchange (DEX), along with the issuance of recovery tokens that can be traded. Furthermore, there are plans for a periodic buyback of these recovery tokens, which would be funded through the platform’s profits and newly established revenue streams.
The hack that resulted in WazirX users losing over $230 million was attributed to the infamous Lazarus Group, which executed a security breach in July 2024 through an apparent interception of private keys. WazirX has since pointed fingers at its custody provider, Liminal, for the security lapse; however, Liminal has rejected this assertion, suggesting instead that vulnerabilities on WazirX’s part were to blame.
The hacker managed to launder all stolen funds through various cryptocurrency addresses, utilizing Tornado Cash to obfuscate the transactions, as reported by CoinDesk in September. This development has significantly dampened hopes for a complete recovery of the lost assets. Despite these challenges, WazirX continues to strive for the recovery of the funds, albeit with limited success thus far.
