WazirX Parent Calls for ‘White Knights’ in Hack Recovery Efforts
Following the debilitating $235 million hack in July, WazirX’s parent company Zettai is attempting to secure partnerships and emergency funding. According to a report published by the Economic Times, the company has approached 11 well-acknowledged crypto exchanges and trading firms in a bid to steady the platform and retrieve the assets lost.
In Pursuit of Emergency Funding and Partnerships
The co-founder of WazirX, Nischal Shetty, told a townhall meeting on Monday that active discussions were currently being held with prospective investors-what he labeled “white knights”-who would supply the needed funding. “We’re working to try and get potential investors, white knights, to contribute funding. Those discussions are ongoing,” Shetty said.
However, Shetty and the firm’s legal consultants warned them that even with the probable support of those investors, the compensation to be given to the investors of WazirX for the losses from the hack may not be fully covered.
Investor Payouts May Be Capped
Jason Kardachi, managing director at Zettai’s advisory firm Kroll addressed the chances of restoring the hacked funds: “Best case, 55% to 57% return on loss is a possibility.” “In crypto terms, it’s extremely unlikely that we can make people whole,” Kardachi said, further revealing how badly the hack had affected WazirX’s financial situation.
Interaction with 11 Major Trading Platforms
Zettai has initiated a consultation process with 11 major trading platforms in the hope of helping bring some stability to the exchange. These would-be allies are reported to handle anywhere between 5.5 and 100 million users, while daily transaction values can reach in a range from $5 million up to $4 billion, thus having an overriding interest in the stabilization of the exchange.
These discussions with these trading platforms only commenced after Zettai filed for a moratorium from the Singapore High Court last week. The move was made in direct response to the July 18 cyber attack on WazirX, which saw more than $230 million in crypto assets being stolen.
Restructuring Amidst Ownership Uncertainty
Shetty also pointed to the ongoing restructuring process, likely to last at least six months. The latter is further exacerbated by the currently existing disagreement about who owns WazirX: Zettai or Binance. The ownership ambiguity therefore presents a problem in securing new investors or a third-party takeover.”.
However, Shetty has been trying to reassure creditors that various solutions are being looked at in the hope that the situation could be resolved without needing a change in ownership of the platform. This is an important way forward, given the complications that accompany the battle for ownership.
Ownership Tussle between Zettai and Binance
The ownership dispute has its roots in the very announcement of WazirX’s acquisition by Binance in 2019. This ownership issue has come under most scrutiny since 2022, with control and rights to its operation being legally contested. Zettai still operates the assets of WazirX via its subsidiary, Zanmai Labs, while the dispute is ongoing.
And so, the crypto community remains vigilant while WazirX goes through a tough time, hoping that Zettai’s pursuit of a white knight would then restore WazirX to a time of stability.
