WazirX has initiated Phase 2 of its INR withdrawal process, allowing users to access up to 66% of their INR balances immediately. Originally slated for September 9th, this move aims to improve user access and demonstrates the platform’s commitment to assisting users during this challenging period.
Seeking Financial Lifelines Amidst Parent Company’s Struggles
Amid this rollout, Zettai, the parent company of WazirX, is actively seeking “white knights”—potential investors or partners—from 11 major crypto exchanges and trading firms. These efforts are part of a broader strategy to secure emergency funding or form partnerships to stabilize the company.
Nischal Shetty, co-founder of WazirX, disclosed during a recent town hall meeting that the company is in talks with potential investors to mitigate losses. However, despite these efforts, uncertainty looms over whether WazirX investors will fully recover their funds.
Jason Kardachi, managing director at Zettai’s advisory firm Kroll, stated that even with external support, a full recovery of lost funds appears unlikely. The best-case scenario, according to Kardachi, would see a return of only 55% to 57% of the lost assets.
Impact of the July 18th Attack and Ongoing Legal Battles
The discussions with potential financial partners follow Zettai’s application for a moratorium at the Singapore High Court last week. This request came after a cyberattack on July 18th resulted in the theft of over $230 million (₹2000 crore) in cryptocurrency assets.
WazirX’s restructuring process is anticipated to take at least six months. Shetty emphasized that this timeline is necessary due to the complexity of developing a recovery plan and incorporating feedback from the company’s 4.3 million creditors.
Complicating the situation further is an ongoing ownership dispute between Zettai and Binance, which has fueled confusion over who is ultimately responsible for users’ crypto balances. This dispute is seen as a critical factor in resolving the current crisis without resorting to a third-party takeover.
Ownership Dispute Casts Doubts on Recovery
Since Binance’s announcement of its acquisition of WazirX in 2019, ownership issues have surfaced, with Zettai continuing to manage WazirX’s assets amidst legal battles over control and operational rights. This dispute has added another layer of complexity to WazirX’s efforts to navigate the current crisis and secure a path to recovery.
Conclusion
As WazirX advances its withdrawal process and seeks financial support, the platform’s future remains uncertain. The outcome of ongoing negotiations and legal disputes will likely play a decisive role in determining whether WazirX can overcome its current challenges and restore confidence among its users.
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