WazirX Completes Asset Rebalancing, Invites Creditors to File Disputes

WazirX has announced the completion of its asset rebalancing process. On February 11, the troubled exchange informed users affected by the July 2024 hack that they can now check their potential compensation based on their balances as of July 18, 2024. To facilitate this, WazirX has published a Preliminary Creditor List on its website, displaying claimable amounts in US dollars.

WazirX now needs 75 percent of its creditors to approve its proposed restructuring plan. This Scheme of Arrangement was cleared by the Singapore High Court in January for presentation to creditors. While WazirX has not specified when the voting will begin, a company spokesperson told Gadgets 360 that the process could start by late February or early March.

WazirX Shares Update on Rebalanced Net Liquid Platform Assets and Raising Disputes

On February 10, WazirX announced that it had rebalanced its Net Liquid Platform Assets (NLPA) to align token denominations with its assets and liabilities.

To enhance transparency, the exchange introduced three new tabs on its mobile app and website, allowing users to view their rebalanced portfolio, their balance as of July 18, 2024, and the preliminary creditor list. Co-founder Nischal Shetty shared a screenshot of these updates on X, keeping the WazirX community informed.

This step will give WazirX creditors access to key details, including the USD value of their computed shares in the rebalanced NLPAs, their effective balance recovery percentage, and their unique IDs, the exchange said in a blog post. Additionally, people will also be allowed to check the current value and token breakdown of their share of the NLPAs alongside the details of their crypto deposits on the platform through the new tabs on the WazirX app and website.

The exchange will allow users to review claims under their names and, if needed, dispute their assigned amounts. Creditors can submit disputes regarding their assets through the Claim Dispute Form between February 10 and February 19.

“Users can submit their claim disputes, provide valid proof, and have their requests reviewed by the independent assessor. If approved, the corrections will be updated in their portfolio, ensuring accuracy and fairness in the restructuring process,” the exchange noted in a separate blog.

Singapore-based financial restructuring firm Kroll will oversee the forms and creditor responses, finalising any necessary adjustments.

Recent Developments in WazirX’s Restructuring

Last month, WazirX announced that its compensation scheme for creditors would involve issuing recovery tokens (RTs) and distributing recoveries through an RT purchase mechanism. The exchange also plans to strategically relaunch its platform with enhanced capabilities.

Additionally, WazirX intends to introduce a new business model cantered around a decentralized exchange (DEX) while reviving its platform to improve recovery margins for creditors. This will be achieved through ‘profit sharing, the recovery of illiquid wallet assets, and white knight collaborations’.

However, if the scheme is rejected and liquidation becomes necessary, the process of recovering and redistributing funds to creditors could extend until the end of 2030.

“Within 10 business days of the scheme being effective, the platform will restart, though subject to matters such as Court timelines. This distribution, which will be made in tokens, and made available once users vote yes for the scheme, will represent ~85 percent of creditors’ balances, valued as of 18 July 2024 1PM IST,” the exchange stated.

On July 18, 2024, a multi-signature wallet belonging to WazirX, managed under the oversight of Liminal Custody, was breached, resulting in losses exceeding $230 million (roughly Rs. 1,900 crore). Both Liminal and WazirX have denied any compromise of their respective networks.