WazirX embarks on 30-day moratorium as rival seeks to recover around $10 million in stuck funds
Embattled crypto platform WazirX has entered an initial 30-day moratorium following a $234 million hack in July, pending a decision by Singapores High Court on whether to grant an extension, according to an Aug. 28 statement.
This development arose as rival platform CoinSwitch announced its intention to pursue legal action to recover approximately $9.6 million in digital assets trapped on WazirXs exchange.
Moratorium
WazirX revealed that Zettai Pte, the Singapore-incorporated company behind its operations, filed for the moratorium on Aug. 27. This filing triggered an automatic 30-day freeze, giving the firm time to draft a restructuring plan.
However, WazirX estimates it will need at least six months to finalize the plan and collaborate with stakeholders.
The company emphasized that the moratorium provides crucial breathing room to address users crypto balances and work toward recovering funds.
WazirX explained that under the planned restructuring, the hacks impact would be distributed among users, who would receive a share of the available token assets proportional to their account balances.
WazirX co-founder and CEO Nischal Shetty noted that the restructuring timeline depends on how quickly the firm and its creditors can agree on a path forward. He added:
One key factor in our timeline for restructuring is how quickly we can all come together and agree on a path forward. We need to be united in this effort. Your support and collaboration are crucial to making this happen.
Legal threat
In an Aug. 28 thread on social media platform X, CoinSwitch stated that it had substantial assets including fiat currency, ERC20 tokens, and other digital assets stuck on WazirXs platform following the recent hack.
CoinSwitch explained that it had been unable to recover the funds despite multiple attempts to resolve the issue. The company also expressed frustration over WazirXs lack of clarity regarding a full recovery plan.
Due to this, the company stated that it has no choice but to pursue legal action to recover the funds.
Meanwhile, CoinSwitch assured its users that the affected funds represent less than 1% of its total assets. It is using its treasury reserves to maintain a 1:1 ratio for user holdings.
However, Shetty remains unfazed by the potential lawsuit and said that all users will be treated fairly, regardless of the size of their claims. He added:
If legal actions are necessary, so be it.
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Text source: CryptoSlate
