WazirX Has Filed for a Moratorium Amidst Its Ongoing Restructuring Process Following the Major Hack

Through X, WazirX on their end tried to simplify the ongoing changes in detail to provide transparency and full understanding of the restructuring process.

In a statement released on Monday, cryptocurrency exchange WazirX announced that it has filed for a moratorium with the Bombay High Court as part of its ongoing restructuring following a major hack.

The hack, which occurred in November 2023, resulted in the theft of digital assets worth ₹2,000 crore.

The exchange is currently in the process of restructuring and has set up a ₹250 crore fund, known as “Cost Reserves,” to support the process.

Out of this amount, ₹100 crore will be used to cover operating costs, professional fees, and other expenses related to the restructuring.

An additional ₹150 crore will be allocated to support the three-year restructuring plan, which includes restarting the WazirX platform, launching a new decentralized exchange (DEX), keeping the business running, and recovering lost or stolen assets to benefit creditors.

Initially, the restructuring plan was expected to take 18 months, and creditors were concerned about how the extra funds would be secured.

However, due to the efficient progress of the restructuring, the plan is now expected to be completed in three years.

To secure the extra funds, the WazirX team kept the initial Rs 100 cr in a certain set of tokens, which are currently worth more from their August 2024 price. This approach ensured that no further tokens were reserved.

“This approach allowed us to secure the necessary funds to support a successful restructuring without impacting the existing assets or requiring further tokens to be reserved,” a spokesperson for the exchange said.

The ₹250 crore fund is crucial for WazirX’s recovery and will be used to compensate creditors who lost assets due to the hack.

Initially, the exchange planned to use a portion of its recovery to launch a new DEX, but due to the hack and subsequent restructuring, this plan has been delayed.

Despite this setback, WazirX is committed to launching the DEX as part of its broader strategy to support the recovery process and provide diverse avenues for engagement with the cryptocurrency ecosystem.

The exchange also noted that until the ₹250 crore fund is fully recovered and shared with creditors, 100% of the company’s profits will go to them.

After the fund is fully recovered, WazirX will still share 50% of its profits with creditors for the next three years or until all Recovery Tokens are bought back.

This approach ensures that creditors benefit without further compromising user assets, positioning WazirX for long-term recovery.