In July, Indian crypto exchange WazirX suffered from a cyberattack that brought it to its knees. Hundreds of millions of dollars in crypto were stolen in the hack.
Since then, the exchange has set aside millions of dollars to help cover legal costs.
The Filing
WazirX’s holding company, Zettai Pte Ltd. is based in Singapore. On Wednesday, it filed an affidavit with the High Court.
The company submitted a request for a moratorium for 30 days to help facilitate discussions with creditors and investors for stabilizing the platform.
If the court grants the moratorium, it would be essential for ensuring the continuity of the platform and prevent further legal disruptions.
While withdrawals on the exchange have been suspended after the attack, it is now working on restoring user funds.
There had been considerable financial strain on the exchange because the attackers got away with stolen cryptocurrencies worth $230 million. This includes Shiba Inu tokens valued at $102 million.
Many users have been left stranded due to the attack and many have had their trust in the exchange shattered.
The Response
On Thursday, WazirX’s co-founder, Nischal Shetty, attempted to assuage customers’ concerns. He stated that the exchange was resolving the issues as quickly as possible.
CoinSwitch, a rival exchange, has taken legal action against its struggling competitor related to funds that are tied up on the WazirX platform.
Zettai said in the affidavit that it was considering a potential scheme that would take the needs of its creditors into account to get payouts.
The scheme is aimed at figuring out the best way of distributing the users’ assets. Zettai also provided details about the company’s liquid assets.
This includes crypto worth $284 million, while an additional $2 million has been set aside for legal reservations, ongoing investigations, and its efforts to restructure its liabilities.
The Steps
The company has also leveraged legal and financial advisors to assist in classifying user token balances and rebalancing available assets.
They also want to provide users with in-kind crypto distributions instead of fiat. Reports indicate that Zettai is having discussions with 11 potential investors.
These have been referred to as ‘white knights’, as they are trading businesses and large crypto exchanges that can inject capital into the platform.
They would also be able to help with the process of recovering user funds. WazirX’s ongoing dispute with Binance has added another layer of complication to the situation.
It started after Binance chose to distance itself from WazirX back in 2022 and also attempted to terminate its wallets, all of which have complicated the situation.
In 2019, Binance had initially claimed to have acquired the Indian crypto exchange. However, the control and ownership of the platform remained up in the air.
For now, Zettai has complete control of WazirX’s assets and it is now aiming for a six-month window to finish crypto withdrawals.
The holding company wants to track the stolen assets and it has hired a third-party blockchain forensics firm called zeroShadow to do so.
It revealed that it has reached out to more than 500 crypto exchanges to block the wallet addresses that were linked to the stolen assets.