WazirX has filed an application with the High Court of Singapore. They’re seeking a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act. This step aims to give the crypto exchange some “breathing space” to reorganize its liabilities after a major exploit.

The company behind WazirX, Zettai Pte Ltd, submitted the application on Tuesday. Nischal Shetty, the director of Zettai, is leading this effort. The goal is to restructure their obligations through a scheme of arrangement, as shared in a statement with The Block.

If the court approves the moratorium, it will allow Zettai to address users’ cryptocurrency balances and work on their recovery. An automatic 30-day moratorium kicks in after the application, but a hearing to decide its length is still pending.

Zettai also mentioned an ongoing dispute with Binance. They are keeping details confidential but are committed to finding a solution for users quickly and effectively.

According to Zettai, it will take about four to six months before they can reopen withdrawals. They plan to distribute the impact of the exploit among users, treating them as unsecured creditors. This means users will get a share of available token assets based on their claims.

WazirX has also accepted crypto deposits from various Indian law enforcement agencies. These agencies have proprietary claims on those tokens due to a special arrangement.

To increase available assets, Zettai has additional strategies in mind. They’re looking at tracing stolen tokens, implementing revenue-generating products, and exploring partnerships with third parties. This restructuring plan aims to help creditors recover more than they would in a liquidation scenario.

If creditors approve the scheme and the court sanctions it, it will be legally binding. That would allow Zettai to reopen cryptocurrency withdrawals according to the new terms.

Zettai believes they need at least four to six months to finalize the restructuring plan. They feel this is the fastest route to reopening withdrawals. Currently, they can’t resume withdrawals due to the large number of stolen assets. They need a solid restructuring plan to ensure an equitable distribution of token assets.

They understand this timeline may be longer than many users hoped for. However, they stress that this is the most efficient and cost-effective process available. Zettai plans to hold a video town hall next week to explain the moratorium and the restructuring plan, while also addressing user questions.

Now, let’s talk about the exploit. On July 18, WazirX experienced a significant breach. Over $230 million in crypto assets were transferred without authorization. The attack targeted their multisig wallet on the Ethereum network, likely due to a compromised private key.

To execute the attack, the perpetrator upgraded the Safe Wallet to a malicious contract. Security firm Blocksec provided details on how this happened. WazirX paused withdrawals on the same day and later halted trading on their platform as they dealt with the aftermath.

WazirX even offered up to 10% of the hacked funds to help recover the stolen tokens. They also promised up to $10,000 for information that leads to freezing the funds. Unfortunately, evidence suggests that North Korea’s Lazarus Group is behind the attack, and assets are rarely recovered from such hacks.

On July 27, WazirX introduced a "socialized loss strategy" through a social media poll. They faced significant backlash from users. Earlier this month, they announced plans to revert all trades to their status before the exploit, following the withdrawal freeze on July 18.

Recently, WazirX canceled all open orders and returned any INR and crypto assets reserved for these trades. This is part of their ongoing efforts to resolve issues surrounding INR and crypto balances on the platform.