Singapore Court Reject Wazirx Restructuring
More than 44 lakh users of India's leading crypto exchange WazirX have suffered another major setback. According to the official X account of WazirX, the Singapore High Court has formally rejected the company's Restructuring Plan. This was the same plan through which the company was going to start returning the trapped money to its users. What was the WazirX Restructuring Plan?
Through this restructuring plan, the company:
was going to launch a new Decentralized Exchange (DEX).
There was a plan to issue Recovery Tokens.
Liquidity was to be brought to the market through Token Buybacks.
Most importantly, the target was to start partial payments to the affected users within 10 days, but after the court's decision, all these plans have now been postponed.
Company silent on WazirX Restructuring Plan and users angry
On Tuesday, WazirX sent an email to users informing them of this decision, but no new timeline was given in it nor any clear next step. The company only said that it is reviewing legal options and may possibly file an appeal.
The biggest anger is that none of the top executives of the company, even Founder Nishal Shetty, have come forward so far. Neither has he given any public statement nor has he kept any conversation going on social media.
Comments and replies have been turned off on WazirX's social media channels, which has further increased the anger of the users.
Huge drop in WRX Token
As soon as the court's decision came out, WazirX's native token WRX fell by 39% in a single day. This decline reduced the value of token holders in one go and a wave of fear and anxiety ran among the users in the market.
Threat of liquidation looms
If WazirX does not present a new plan soon or appeal against the court's decision, the company may face liquidation under Section 301 of the Companies Act of Singapore.
This means that the remaining assets of the company will be sold at very low prices and users may get very little or nothing of their trapped money.
Other confusion with change of legal base
WazirX has shifted its legal base to Panama. Due to this, Indian users do not even know what their legal position is now or whom they should contact.
June 6 deadline - last hope?
The Moratorium Deadline given by the Singapore Court is now ending on June 6. This date has now become the last hope for millions of users who have been waiting for their funds to return for the last 10 months.
Are the funds safe?
After the WazirX hack of about $230 million last year, it was under tremendous pressure due to the funds being locked. WazirX has said in an email that the assets kept in their NLPA (Non-Liquid Pooled Asset) structure are safe. But this security also seems to be futile as long as users cannot withdraw.