Why WazirX plans to form a ‘Committee of Creditors’ by October 9
Two months after losing $230 million (approximately Rs. 1,900 crore) to hackers, WazirX is still looking for ways to involve its community members in the ongoing restructuring process. The beleaguered crypto exchange has announced that it is in the process of forming a ‘Committee of Creditors’ (COC). Zettai, WazirX’s Singapore-based majority ownership entity, will oversee the establishment of the COC, which will consist of ten members selected through a two-phase process from a group of creditors who have expressed interest in joining the committee.
“Creditors will be sorted in terms of the smallest claims to the largest claims, with this overall list being split into 10 separate tranches each representing 10 percent of the claims, with the sum of all tranches being $546.5 million (approximately Rs. 4,588 crore) in claims. ”, the exchange explained in a blog post. “One COC member will be selected at random from each of the tranches of the COC member pool.”
Zettai may be required to submit the identities of the selected COC members to the court in Singapore, which recently granted WazirX a four-month moratorium on its financial restructuring. Zettai is working with a financial restructuring company Kroll to devise a plan.
The first phase of member selection is expected to be completed on Thursday and Zettai plans to send emails to specific creditors identified in phase 1. These creditors will have to express their interest in becoming COC members before October 7. The selection phase is expected to be completed on October 8 and the final selected ten members will be delivered on October 9.
“The company (Zettai) and its advisors aim to hold the first COC meeting within one week of the establishment of the COC and will notify selected COC members at least 48 hours in advance of any proposed COC meetings ” the blog post said.
Reactions to this decision by WazirX have surfaced among people on social media interrogate WazirX on the potential benefits of setting up the COC during the restructuring process. The exchange will host its third virtual town hall meeting on Friday to explain the COC selection process, with more details expected to emerge in the coming days.
