On 25 September 2024, in moratorium hearing before the High Court of Singapore, Zettai Pte. Ltd. was enquired with several questions. The proceedings, presided over by Judicial Commissioner Kristy Tan, took place via Zoom over two days, with numerous creditors raising concerns about Zettai’s transparency, financial practices, and the fairness of the proposed moratorium. Zettai, which is connected to WazirX, a cryptocurrency platform implicated in a significant hack, sought a moratorium to reorganize its financial structure and address the fallout from the hack. However, creditors voiced strong opposition, casting doubt on Zettai’s intentions and the legitimacy of its actions.
During the hearing, creditors accused WazirX and Zettai of manipulating the voting process related to the moratorium. Several users alleged that they had not been given the opportunity to vote against the moratorium initially, resulting in skewed results in favor of Zettai. One participant remarked that the company was “conducting the voting procedure to get it passed in their favor,” further deepening suspicions about the process. Questions were also raised about the company’s failure to provide a clear and fair voting structure, with many users expressing a lack of trust in the process.
In addition to concerns about the voting, the hearing also brought to light some transparency issues. Creditors demanded that Zettai and WazirX disclose proof of their reserves, which had been previously promised. Many questioned why unaffected users were being forced to bear the financial losses of those whose tokens were stolen during the hack. Some creditors went so far as to suggest that the hack may have been an inside job, which raises doubt on the company’s handling of the situation. Despite WazirX’s claims that the hack was a result of external interference, multiple users insisted on a full investigation to determine whether insider involvement had played a role.
Financial mismanagement of WazirX was another issue raised during the hearing. Several creditors accused WazirX of using user funds to cover legal expenses without prior authorization. One creditor pointedly asked, “Who authorized Nischal Shetty to use users’ money for their purposes?” This allegation heightened the distrust many creditors already had toward the company, as it appeared that users’ funds were being improperly utilized without transparency or consent. The company’s financial practices were scrutinized further when creditors questioned why Zettai had not used its own profits or reserves to address the legal proceedings, instead of drawing from user funds.
In response to these concerns, the court directed Zettai to provide a detailed affidavit addressing all queries raised during the hearing. The company was given three weeks to submit this document, with the court emphasizing that all information must be made available to creditors. Only after these steps have been completed will the court decide whether to grant the moratorium.
At present, the moratorium has not yet been granted, with the court deliberating on whether the conditions of transparency and financial disclosure have been sufficiently met. The court has directed Zettai to release all relevant information before any final decision is made.
Judicial Commissioner Kristy Tan directed Zettai to submit an affidavit answering the questions rased during the proceedings on 25.09.2024 she further discussed the importance of transparency and financial disclosure, making it clear that these elements are critical to the court’s final decision. The case will continue once Zettai submits its affidavit, after which the court will assess the creditors’ feedback and determine whether the moratorium will be granted.
