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WazirX’s restructuring with Kroll raises concerns, echoing Vauld’s failed plan and leaving creditors wary of mismanagement.
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Creditors call for transparency in WazirX’s restructuring, fearing repeat of Vauld’s mistakes and the concealment of actual losses.
Recent restructuring activities at WazirX have annoyed creditors as they saw similarities to Vauld’s failed restructuring that transpired over two years ago. Both companies hired Kroll, an international restructuring firm that fuels speculations regarding mismanagement, opacity, and the consequences for creditors in the long term.
The Vauld Experience: A Warning for Wazirx
Due to the restructuring plan done by Vauld and spearheaded by Darshan Bathija and with the help of Kroll, creditors were not pleased. The scheme was to lock token values during a low market and that gave Kroll and Vauld high recovery rates when the market recovered.
As for Vauld, although they have managed to refund about $100 million to creditors, they inflated it to $200 million during the market pump, so as to conceal their actual losses.
Furthermore, the creditors of Vauld also had other issues. Writing off could only be filed in terms of frozen USD values to discourage claims for real token value decrease. More fuel was added to resentment over mismanaged funds, no audits, and the inability to recover $6-$8 million lost through hacks prior to insolvency.
Wazirx Acquiring Peek for Its Restructuring
WazirX creditors did not quickly forget this as CEO Nischal Shetty recently proposed a restructuring, again with Kroll. It remains questionable whether Kroll will highlight the scale of the problem and reduce users ‘claims or whether WazirX will continue to refer to minuscule gains as big wins.
It is important when comparing Vauld and WazirX, the exposures to creditors, particularly when WazirX undergoes restructuring. Victims aka creditors have called for more attention, disclosure, passion for regaining lost funds and less of the cycle that was futile, disappointed Vauld users.
