WazirX held its first creditor meeting on October 15 as part of its restructuring efforts after the July hack. Only four out of ten Committee of Creditor (COC) members attended, raising concerns about representation.
During the meeting, the company, alongside financial advisors from Kroll, touched upon the restructuring process and plans to address the asset shortfall and potential profit-sharing.
WazirX has noted the absence of 6 COC members
Crypto exchange WazirX announced that it had concluded its first creditor meeting on October 15. The meeting touched upon the restructuring process after the July security breach, but only four creditors attended.
WazirX co-founder Nischal Shetty and the company’s top executives attended the meeting with the financial advisors from Kroll. While the names of the CoC members are confidential, all 10 creditors are assigned a CC number with initials. Six of the selected CoC members were missing from the meeting which discussed the next steps in the Court process.
WazirX restructuring proposal
The company formed a committee of creditors (COC) to represent creditors’ interests as part of the Singapore Court-sanctioned moratorium. 10 creditors were randomly selected as part of the exchange process to become part of the committee. While being part of the CoC was based on creditor discretion, once selected, the members needed to attend the meetings.
The exchange had previously said that failure to remain an active member could lead to removal from the COC. The meeting concluded that the exchange would follow up with the non-attending members and replace them if they do not plan to actively participate.
Zettai could appeal to extend its 4-month moratorium
Despite the absence, the meeting addressed key concerns from COC members about representing millions of creditors and managing feedback. Members appeared concerned about the responsibility that comes with the selection, handling questions, and the tight moratorium timeline. Some creditors suggested speeding up the process, but the company explained the constraints of court schedules. In addition, the company plans to apply for an extension of the moratorium period before its expiry.
Questions were also raised about setting aside funds for emergencies, keeping the exchange partially operational, and the potential recovery from the asset deficit. Currently, the exchange has a 45% asset deficit. The company also clarified that rebalancing is required before withdrawals can be initiated.
Meanwhile, Zettai’s restructuring proposal will address the asset shortfall by equitably distributing them to the creditors. The company notes in its financial advisory that it will allow creditors to choose the type of tokens for distributions while they attempt to recover stolen tokens, pursue partnerships for profit-sharing opportunities, and potentially reopen WazirX’s business to generate profits that could be shared with creditors.
WazirX COC members and executives in attendance
Additionally, Zettai is exploring the creation of a secondary debt market to offer early liquidity for creditors who need it. The next key dates to watch out for this year would be in November when Zettai would seek permission to hold a Scheme meeting. The creditors would review and vote on the restructuring proposal in this meeting. But the Court would hear this application for approval in early 2025. The Scheme meeting is expected to convene in February.
