Currently, the creditor base is skewed towards low-value claims, WazirX said. About 87 percent of platform users account for less than 8 percent of total claims by value | Photo: Shutterstock
Embattled cryptocurrency exchange WazirX has begun the process of establishing a 10-member committee of creditors (CoC) by October 9 to provide consultations on its restructuring procedures.
Creditors, who are users affected by the $230 million cryptocurrency theft, will be ranked by the size of their claims, from smallest to largest. This list will be divided into ten separate tranches, each representing 10 percent of the total claims.
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Currently, the creditor base is skewed towards low-value claims, WazirX said. About 87 percent of the platform’s users account for less than 8 percent of the total claims by value.
In a blog post, the crypto exchange said that the sum of all claims in these tranches amounts to $546.5 million. In total, the platform has around 4.3 million creditors.
One percent of creditors will be randomly selected to establish the Contingent Creditors Fund. These will be eligible to form a potential pool of CoC members and subsequently one creditor will be randomly selected from each tranche of this cohort to form the final committee.
“It is essential that sampling be completely random to eliminate any potential bias from the selection process; a random number generator will be used to ensure randomness in selection,” the company stated.
WazirX plans to establish the group of contingent creditors by October 3 and a potential group of CoC members by October 8. Their goal is to finalize the committee by October 9.
The company will organize a CoC meeting a week after the committee is formed.
Last week, a Singapore court granted a four-month moratorium to the platform, giving the embattled company time to restructure its business without the pressure of legal proceedings.
A moratorium provides applicants with temporary relief from legal action.
WazirX, whose parent company Zettai is based in Singapore, filed for restructuring before a Singapore court on August 23.
Last month, the company said customers affected by the recent cyberattack would not be able to recover their full funds, even as the company seeks to restructure.
In a virtual press conference earlier this month, company advisors explained that the company could recover between 55 and 57 percent of the capital.
The crypto exchange platform is currently restructuring and looking for a white knight to provide capital and seek partnerships and collaborations.
This includes implementing revenue-generating products and mechanisms to share profits with users, track and recover stolen cryptoassets, and/or allow users in urgent need of liquidity to withdraw cryptoassets more quickly and exit the restructuring process.
The company had blamed its third-party wallet service provider, Liminal Custody, for the security breach.
Liminal has denied the accusation.
First published: October 3, 2024 | 14:49 IS
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