In a recent development highlighting the ongoing complexities within the cryptocurrency exchange landscape, the Delhi High Court has mandated that Zettai Pte Ltd, the Singapore-based entity behind the crypto exchange WazirX, unveil its acquisition contract with the digital assets behemoth, Binance, and divulge the particulars of its restructuring efforts. This direction comes amidst a concerted push by creditors for greater transparency in the aftermath of a cybersecurity breach that led to the pilfering of $235 million last year.
Presiding over the matter, Justice Sachin Datta decreed on Tuesday that Zettai must submit a copy of its pact with Binance within the span of a week, in addition to the proceedings related to its restructuring scheme from the Singapore High Court. This order marks a pivotal juncture in the exchange’s bid to navigate through its amended restructuring plan. Notably, a subsequent vote on this revised scheme was executed on August 6, subsequent to Singapore’s High Court annulling a prior rejection and commanding a revote.
The intricacies of WazirX’s ownership and the maneuvering to recuperate from the July 2024 cyberheist, which saw a substantial drain of user funds, remain under intense scrutiny. The relationship between WazirX and Binance has been particularly contentious, with Binance vociferously refuting in September 2024 any claims of completing the acquisition of WazirX. Binance’s stance underscores a disapproval of attempts to shift blame, depicting them as evasion tactics while steadfastly denying ownership, control, or operational influence over WazirX notwithstanding an initial agreement.
Amplifying the demands for accountability, creditors have lodged a petition calling for the formation of a Special Investigation Team tasked with probing the cyberattack. It’s a move endorsed by both Sudhir Verma and Kunal Dhariwal in October 2024, openly challenging the platform’s response to the hack and its fallout. Further, January saw the Delhi High Court issuing notices to various stakeholders, including the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and several governmental bodies to ascertain the regulatory measures in place for cryptocurrency platforms and the actions instituted against WazirX.
This judicial directive to unearth the Binance–Zettai deal underscores a recognition of digital asset users’ entitlement to information and ownership clarity. It ignites a beacon of hope for a more robust regulatory framework to fortify the industry against such malfeasances. The petitioners, represented by legal experts from the Web3 consulting sector, assert the necessity of a dedicated Special Investigation Team, encompassing authorities from diverse regulatory and investigatory backgrounds, enabling a comprehensive probe into the cyberattack.
As the legal proceedings unfold, the spotlight remains firmly on Zettai’s restructuring journey. Despite initial setbacks, including a lackluster turnout in the first voting process, the latest round of voting concluded on August 6, with the consulting firm Alvarez & Marsal overseeing the integrity of the process. The subsequent hearing, slated for August 26, anticipates RBI officials’ participation, as the saga continues to navigate its legal and operational labyrinth. WazirX, at the heart of this unfolding narrative, has yet to respond to these developments, leaving industry observers and participants eager for the next chapter in this evolving story.