WazirX, reeling from a devastating cyberattack in July 2024, is now embarking on a complex legal restructuring process, the Singapore Scheme of Arrangement, to address the shortfall in cryptocurrency balances while simultaneously rolling out a phased plan to partially restore INR withdrawals for its users starting from August 26, 2024.
The breach resulted in the loss of a significant portion of ERC-20 tokens, prompting the platform to suspend all trading and withdrawal activities, angering the crypto community.
The platform has decided to pursue a legal avenue known as a Singapore Scheme of Arrangement, a restructuring mechanism rooted in Singapore’s Insolvency, Restructuring, and Dissolution Act (2018). This arrangement aims to provide users with a fair and legally binding distribution of cryptocurrency assets.
“We have decided to pursue a Singapore Scheme of Arrangement to facilitate an equitable and user-approved distribution of cryptocurrency assets pursuant to a Scheme,” WazirX announced.
The proposed restructuring plan must be approved by WazirX’s user base through a voting process. If accepted, it establishes a legally binding framework for asset distribution that considers user preferences.
In contrast to the cryptocurrency balances, WazirX has made progress in resuming withdrawals of INR balances, which have been frozen since the cyberattack. Starting August 26, 2024, WazirX will enable INR withdrawals in phases, allowing users to access up to 66% of their balances.
The phase will see users withdrawing half of this 66% limit between August 26 and September 8, followed by the full 66% limit from September 9 to September 22.
Despite the positive news, it’s important to note that approximately 34% of INR balances remain frozen due to ongoing disputes and investigations by various law enforcement agencies.
WazirX clarified that these investigations are not targeted at the platform itself but involve third parties. The frozen funds are being held as a precautionary measure. Currently, the platform is silent on when to release these frozen balances.
“Due to ongoing disputes, and certain investigations by various law enforcement agencies (“LEAs”) which are assisting with (and it is not a target of such investigations), ~34% of INR balances are currently frozen and are not immediately available for withdrawal,” WazirX explained.
Recently, WazirX announced that its laptops weren’t compromised in the $230 million crypto heist. The platform held a user poll but failed to release assets despite an overwhelming vote in favour of doing so from the users.
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