Zettai Pte. Ltd. Seeks Moratorium From Singapore Court After $234M WazirX Cyberattack

The High Court of Singapore has received a plea for a Moratorium under Section 64 of the Insolvency, Restructuring and Dissolution Act, 2018 from Zettai Pte Ltd, the parent company of Zanmai Labs, which oversees the WazirX cryptocurrency exchange in India. Following a major cyberattack on July 18, when assets worth over $234.9 million were transferred to an unknown address, the exchange's users expressed considerable alarm over the development. This action has already been taken.

In order to provide Zettai with some legal breathing room as it works on a plan to reorganize its obligations, the company filed an application for a moratorium on Tuesday. As per the company's blog post, the purpose of this measure is to ease users' concerns over the safety of their Bitcoin holdings and expedite the process of recovery.

The business stated that a hearing date has not yet been set.

Why Did Zettai Request A Moratorium?

"Zettai is applying for a moratorium to ensure that Zettai has sufficient time and breathing space to work on a restructuring for the benefit of its creditors, which is the fastest and most effective process for users to receive improved token recoveries",

Reads the WazirX blog, It is in the best interests of users to support Zettai's proposal for a moratorium since it is essential to guaranteeing that a restructure is feasible.

Additionally, the business made it clear: "As users are aware, Zettai and Binance are still at odds. We regret that we may not be able to release certain details regarding this issue due to confidentiality obligations. Still, Zettai has taken the lead in simultaneously facilitating a swift and efficient resolution for Platform users who are contingent unsecured creditors of Zettai, even if this issue is still pending".

The financial impact of the cyberattack would be allocated proportionately among those customers categorized as unsecured creditors, according to Zettai's summary of the proposed restructuring plan. Regarding their total claims against the network, the concept proposes that users will get their fair part of any recoverable token assets.

The firm said that Bitcoin withdrawals may restart in accordance with the conditions outlined in the plan if the restructuring plan is accepted by the creditors and upheld by the Singapore High Court. At least six months are expected to pass before the restructuring process is finished. The co-founder of WazirX, Nischal Shetty, owns 74.27 percent of Zettai, A Singaporean company, while Zettai owns 99 percent of Zanmai Labs, according to
YourStory. Entrackr reports that Sameer Hanuman Mhatre holds an 18.56 per cent stake, while Siddharth Menon has a 7.17 per cent holding. WazirX recently revealed that, in the wake of the interim withdrawal prohibition brought on by the cyberattack, users would soon be permitted to withdraw up to 66% of their Indian Rupee (INR) balances.

Sued by CoinSwitch is Wazirx, Meanwhile, in an effort to retrieve funds that were frozen as a result of the security breach, rival cryptocurrency exchange CoinSwitch has filed a lawsuit against WazirX. It was discovered by CoinSwitch that the WazirX platform presently has assets locked at about Rs 810 million ($9.65 million). Fiat money totaling Rs 124 million, ERC20
tokens valued at Rs 287 million, and additional Cryptocurrency valued at Rs 399 million make up this sum. WazirX has been under fire from CoinSwitch, an exchange aggregator, for allegedly not offering a solution in spite of constant attempts to communicate since the event.

The litigation brings a fresh perspective to the aftermath of the assault on WazirX, a prominent cryptocurrency exchange in India. The company has been under fire for its, "Socialized loss" Approach, which aims to disperse the financial consequences of the cyberattack among all of its users.

Author: Aarya Kadam (News Writer) is a final-year BBA student and a creative writer with a passion for current affairs and legal judgments.