Cryptocurrency exchange WazirX’s parent company, Zettai, is currently in talks with 11 crypto exchanges and trading firms to secure emergency funding or establish partnerships in order to recover the $235 million lost in a hack that occurred in July. The co-founder of WazirX, Nischal Shetty, mentioned during a townhall meeting that discussions are ongoing with potential investors or “white knights” to contribute funding, but it is unlikely that investors will receive full compensation for the losses. Jason Kardachi, managing director at Zettai’s advisory firm Kroll, stated that at best, they could return between 55% and 57% of the funds to the investors.
The 11 companies that Zettai is engaging with reportedly handle between 5.5 million to 100 million users and process daily transactions ranging from $5 million to $4 billion. These discussions were initiated after Zettai applied to the Singapore High Court for a moratorium following the cyberattack on WazirX in July, where over $230 million in crypto assets were stolen. The restructuring process of WazirX is expected to last at least six months, according to Shetty, as it involves significant work and feedback from the platform’s 4.3 million creditors.
During the townhall meeting, Shetty highlighted the ownership dispute between Zettai and Binance over the platform. The unclear ownership situation creates ambiguity regarding the contractual counterparty for users with crypto balances on the platform, making a third-party takeover unfeasible. Despite Binance’s acquisition of WazirX in 2019, Zettai has been running the platform through Zanmai Labs. However, the ownership by Binance has been questioned since 2022, leading to legal battles over ownership, asset control, and operational rights.
The ongoing ownership dispute between Zettai and Binance has raised concerns among investors and has complicated the recovery process post-hack. While efforts are being made to secure emergency funding or partnerships, it is uncertain whether the investors will be fully compensated for their losses. The restructuring process is anticipated to be lengthy due to the complexity of crafting a plan and gathering feedback from the creditors. The engagement with major trading platforms and exchanges is a step towards recovering the lost funds, but the challenges posed by the ownership dispute continue to impact the resolution process.
As Zettai consults with 11 major trading platforms to recover the lost funds, the uncertainty surrounding WazirX’s ownership remains a significant obstacle. The ongoing legal battles between Zettai and Binance over ownership, asset control, and operational rights have complicated the situation, making it difficult to determine the future direction of the platform. Despite efforts to secure emergency funding and partnerships, the likelihood of full compensation for investors remains low, with estimates suggesting a return of between 55% and 57% of the funds. The upcoming months will be crucial for WazirX as it navigates the restructuring process and works towards resolving the ownership dispute.
