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The Singapore High Court has provided a conditional moratorium to the Indian cryptocurrency exchange WazirX for four months, less than the six months the exchange had appealed for.
This decision is issued under the Insolvency, Restructuring, and Dissolution Act (IRDA) framework. It is supposed to give WazirX a structured timeline of recovery from the latest financial troubles the platform faced due to a hack attack in July.
The company lost about $234 worth of customers’ money, which extends to 45 percent of the total fund.
During the moratorium, the court pointed out several conditions WazirX must adhere to. Among them are the requirement to reveal the exchange's wallet addresses through a court affidavit and the legal requirement to promptly answer all users' queries.
Furthermore, WazirX was ordered to share the books of accounts within six weeks of the judgement and guarantee that any further voting concerning the exchange’s future is carried on an independent platform for third-party verification.
The transparency measures endorsed by the court will ensure that WazirX users and creditors regain their confidence in the company. By releasing the wallet addresses and sharing the financial information, the exchange confirms that it remains transparent in communicating with its users.
This approach is significant for WazirX as it continues to recover and tries to minimize the effects of the hack on its operations and clients’ assets.
Nischal Shetty, the founder of WazirX, emphasized the exchange's commitment to a fair and expedient resolution process. In his statement, Shetty highlighted the preventive measures that WazirX had taken to come to a moratorium fast, which was described as the most decisive measure in line with the fastest, fair, creditor-approved, and legally binding way to resolve the situation where creditors have only a token choice and potential upside in a rally.
This statement aligns with the exchange’s approach to the potential market recoveries as a way of impacting the creditors and the users.
During the court proceedings, the judge recognized the good faith efforts by WazirX to address the fallout from the hacking incident.The words of the judge imply that the US exchanges do not consider the tasks of ensuring safety and users’ confidence as simple.
The court’s approval of the moratorium on a conditional basis shows that the interests of WazirX can be protected as it continues to operate while ensuring that its creditors and users are protected.
As the four-month period progresses, WazirX plans to work closely with legal and financial advisors to formulate a comprehensive recovery plan. This plan is expected to detail the mechanisms through which the exchange aims to restore its operational stability and user balances.
Stakeholders are advised to stay informed about the developments and participate actively in any voting processes that may occur as part of the court’s conditions.
