WazirX Parent Calls on ‘White Knights’ to Help Save Exchange
Date: 2024-09-03 Author: Oliver Abernathy Categories: BUSINESS
WazirX parent Zettai is in talks with 11 cryptocurrency exchanges and trading firms to provide emergency funding or partner with them to recover $235 million lost in a hack in July, the Economic Times reported on Tuesday.
“We are trying to attract potential investors, ‘white knights’, to contribute funds. Those talks are ongoing,” WazirX co-founder Nischal Shetty said at a meeting on Monday.
Shetty and the company’s legal advisers said that even with potential ‘white knights’ support, WazirX investors will likely not be fully compensated for the losses they suffered in the cyberattack.
“In the crypto market, it’s highly unlikely that we’ll be able to fully recoup people’s losses,” Jason Cardachi, managing director at Zettai’s consultancy, told Kroll. He added that at best, they’ll be able to recover 55% to 57% of their funds.
Zettai consults with 11 major trading platforms after $230 million WazirX hack
Each of the 11 companies reportedly serves between 5.5 million and 100 million users and processes between $5 million and $4 billion in daily transactions.
These talks come after Zettai filed an application in the Singapore High Court last week seeking a moratorium. The application was filed following a major cyberattack on WazirX on July 18, which resulted in the theft of more than $230 million (₹2,000 crore) in crypto assets.
WazirX Restructuring Process to Take Six Months Amid Ownership Uncertainty
Shetty also added that the restructuring process is expected to take at least six months. This is because a significant amount of work will be required to develop a plan. Feedback from WazirX’s 4.3 million creditors will also need to be taken into account, he noted.
During the meeting on Monday, Shetty presented a slide that highlighted the ongoing disagreement between Zettai and Binance over the ownership of the platform. As a result, the slide stated that unclear ownership creates uncertainty as to who the contractual counterparty is for users holding cryptocurrency on the platform.
He explained that there are innovative ways to resolve the situation without having to hand over the platform to a third party. This approach is necessary because the ongoing ownership dispute makes a takeover of the platform by a third party impossible.
Following the announced takeover of Binance in 2019, Zettai, through Zanmai Labs, operates WazirX. However, Binance's ownership has been under public scrutiny since 2022. The dispute currently centers around litigation over ownership, control of assets, and operational rights, with Zettai managing WazirX's assets during this dispute.
