On 27 August 2024, Zettai Pte. Ltd., the parent company of the cryptocurrency exchange WazirX, filed an application with the Singapore High Court seeking a moratorium under Section 64 of the Insolvency, Restructuring, and Dissolution Act 2018. The application, registered as Case No. HC/OA 861/2024, aims to secure a six-month halt on any winding-up resolutions and legal proceedings against the company as it undergoes a restructuring process.
The moratorium application, submitted without notice, requests the Court to prevent any ongoing or new legal actions, including those before courts, arbitral tribunals, or administrative agencies, from proceeding against Zettai during this period. Additionally, the application seeks to restrict any execution, distress, or other legal processes against Zettai’s property unless expressly permitted by the Court.
The moratorium, if granted, would provide Zettai with temporary relief from legal actions and financial obligations, giving the company a “breathing space” to restructure its operations. Specifically, the moratorium would prevent any new or ongoing legal proceedings against Zettai, including winding-up resolutions and execution of claims by creditors, for a period of six months. During this time, Zettai plans to engage with potential investors and explore restructuring options aimed at stabilizing the company and improving recoveries for its users.
The affidavit supporting the application, made by Zettai’s director Nischal Shetty, outlines the situation the company faces following a devastating cyberattack on 18 July 2024. This attack resulted in the loss of approximately USD 234 million in digital assets from one of WazirX’s wallets managed by the digital asset custody firm Liminal. The attack has left Zettai grappling with financial challenges, including the suspension of all user withdrawals and trading activities on the platform.
The affidavit reveals that the cyberattack has not only caused substantial financial loss but has also led to a wave of panic among WazirX’s users. With over 4.4 million active users, the platform has been inundated with nearly 10,000 withdrawal requests since the incident, forcing Zettai to take drastic measures to prevent a complete collapse.
In response to the crisis, Zettai has engaged various professionals, including Kroll Pte Ltd as financial advisors and Rajah & Tann Singapore LLP as legal advisors, to explore restructuring options. These options include engaging with potential investors or “white knights” to inject capital into the company, thereby improving recoveries for users and stabilizing operations.
The affidavit also touches on the ongoing ownership dispute between Zettai and Binance, which has complicated the situation further. Although Binance had initially taken over control of WazirX’s cryptocurrency wallets, it later distanced itself from the platform, leading to legal and operational uncertainties that continue to affect Zettai’s restructuring efforts.
The moratorium, if granted, would provide Zettai with much-needed time to develop and implement a restructuring plan without the immediate threat of legal actions from creditors or users. The company’s management believes this breathing space is crucial for negotiating with potential investors and ultimately safeguarding the interests of WazirX’s users.
