Zettai Pte., the parent company of WazirX which is lingering from the impact of a massive $235-million cybertheft, is in talks with a white knight for capital support to be able to return users' funds.
The company, in a virtual conference, said the restructuring of its crypto balances will take at least six months. It had applied for a restructuring at a Singapore court on Aug. 23, which grants a six-month moratorium from any legal proceedings.
The Singapore court will take creditors' view on whether a moratorium should be granted. "It is in all creditors' interests to support a moratorium—we ask that creditors show their support," a WazirX spokesperson said.
Under a restructuring, WazirX's priority is to distribute remaining token assets to users in a pro-rata manner via crypto and not fiat, it said. Of the available funds, about 45% will be required as costs for the restructuring, the spokespersons said. "Only about 55% of money will return to customers. We're in ongoing discussions to generate additional money via revenue-generating products and mechanisms to share profit with users, apart from recovering stolen cryptocurrencies."
The company also clarified that the FIR was registered on July 19, a day after the incident. "There are internal processes of law enforcement and those take some time before an FIR is registered," Founder and Chief Executive Officer Nischal Shetty said.
"We followed industry-best practices, maintained a cold wallet, kept hot wallets small and made sure those were secure. But this was a new kind of attack. We had a third-party (Liminal) that was also compromised," Shetty said.
"Blind signing is the biggest learning. It's an unfortunate reality today. Even the ledger a few weeks ago released an update for that. Clear signing is the biggest defence going ahead. Our screen showed us something and we signed on something. Having said that, we don't know what happened on Liminal's end," he said.
The company is recommending users to withdraw, Shetty said. "We are encouraging people to take their funds out. When we restart, you can come back."
However, raising capital for WazirX is not going to be a simple task, given the long-running ownership dispute with Binance. WazirX cannot simply trade capital for equity, Shetty said while addressing a question. During the press conference, the company also refrained from answering any questions on how the dispute with Binance will affect the current situation at WazirX, citing confidentiality.
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