WazirX is considering a “range of options” post-cyberattack

Indian crypto exchange WazirX is considering a range of options in the aftermath of the cyberattack, referring to partnerships and collaborations. However, it added that it was “too early yet to say anything more specific in that regard.”

On July 18, the company was hit by a cyberattack on one of its multisig wallets, which resulted in a loss of nearly $235 million. 

In the media town hall, WazirX added that due to the ongoing ownership dispute, these partnerships and collaborations will not include equity investments. The event was attended by WazirX Co-founder Nischal Shetty, as well as Jason Kardachi and George Gwee from risk and financial advisory solutions company Kroll. 

However, the parties refused to provide further information about the dispute or the nature of these partnerships. 

In an affidavit filed by Shetty in the Singapore court, the company said it is in discussions with eleven different platforms for suitable White Knight candidates. 

White Knight is a friendly investor that offers support to a corporation primarily when the company is facing hostile takeover advances. These players often place a bid offer on the table that acquires the company at a fair consideration. 

On August 28, Zettai Pte Ltd, which operates WazirX’s crypto assets, filed an application with the High Court of Singapore for a moratorium under Section 64 of the Insolvency, Restructuring and Dissolution Act, 2018. 

Singapore-based Zettai Pte owns a 99% stake in the Indian entity, while Shetty holds the remaining. 

Shetty holds a 74.27% stake in Zettai Pte Ltd, while Sameer Hanuman Mhatre and Siddharth Menon hold 18.56% and 7.17% stakes, respectively, according to a report by Entrackr.

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During the town hall, the company repeatedly clarified that restructuring, moratorium, or scheme does not mean insolvency, liquidation, or bankruptcy. 

When asked what Zettai would contribute to the ongoing process in terms of legal fees and so on, Kardachi said, “There isn’t [any] available profits there to use for that purpose.”

Gwen added, “I can set the context as to why Zetai is not able to make that form of contribution. And it’s simply due to the transaction structure that was entered into towards the end of 2019 with Binance. And since the end of 2019, revenues from the crypto business and crypto-to-crypto trading have not been booked by Zetai. And as a result, Zetai does not hold those balances on its balance sheet.”

The parties refused to divulge any further information about the ownership dispute with Binance.

In late 2019, crypto exchange Binance published a blog post saying it had acquired WazirX. But in 2022, when the government raided WazirX and froze around $8.1 million of its funds, Binance distanced itself from the Indian exchange. 

The blog post published to announce the acquisition was updated to say that Binance had entered into a deal with WazirX “limited to an agreement to purchase certain assets and intellectual property.”

However, WazirX has since contested the statement that the deal never went through and that Binance does not own any equity in its parent company, Zanmai Labs.