Singapore Court Grants Indian Crypto Exchange WazirX a Four-Month Moratorium

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Indian crypto exchange WazirX, which lost $234 million in a July hack, filed for a six-month moratorium in the Singapore High Court. 

The court granted WazirX a four-month moratorium but under specific conditions.

The crypto exchange must reveal its wallet addresses via a court affidavit, respond to user queries, and provide account books within six weeks.

Conditions for Granting WazirX’s Four-month Moratorium

After the July hack, which caused it to lose $234 million in crypto assets, WazirX sought a six-month moratorium in a Singapore Court in late August.

The court filing showed that WazirX wanted court approval to delay customer repayment for six months. However, upon reviewing the application, the court granted the crypto exchange a four-month moratorium.

That means WazirX can delay paying the hack victims for the next four months. However, the moratorium only applies if the crypto exchange meets certain conditions.

WazirX must swear a court affidavit revealing its wallet addresses and provide its account books within six weeks. In addition, the crypto exchange must respond to all user queries during the moratorium period. 

Lastly, it must ensure that future governance votes are done on an independent platform. Failure to adhere to or meet these terms voids the moratorium. 

WazirX Seeks Better Ways to Repay Customers Following $234 Million Hack

In July, the Indian cryptocurrency exchange witnessed a hack, causing devastating customer losses. The hacker reportedly looted approximately $234 million in crypto assets, representing 45% of customer funds, laundering the proceeds using crypto mixer Tornado Cash.

The exchange explores ways to repay customers who lost their funds during the Hack. Earlier, its legal team noted that WazirX may not likely repay customers in crypto terms. 

The moratorium application is part of WazirX’s move to buy time as it seeks avenues to repay its creditors (the hack victims). The moratorium gives the exchange a breathing space as the restructuring plans progress. 

In its August 28 announcement, WazirX said the move would enable it to find the most efficient way to address user balances and facilitate fund recovery.

The hearing was held on Wednesday, and the judge delivered the verdict on Thursday. During the Wednesday court proceedings, the judge asked WazirX’s attorneys to consider releasing details of the exchange’s assets outside its crypto holdings. 

According to sources familiar with the matter, the judge commended WazirX for acting in good faith by seeking a moratorium.

The exchange’s founder, Nischal Shetty, commented on the development, noting that filing for a moratorium aimed to ensure a fast, fair, and legally approved resolution path. 

According to the WazirX founder, this move will ensure creditors’ interests are protected, and they can benefit from potential crypto gains should a bull run occur.

“Our immediate filling for the moratorium was a decisive step taken to ensure the fastest, fairest, creditor-approved, legally binding path to resolution where creditors have a token choice and potential upside in a bull run,” Shetty said.