WazirX has released a new video explaining what will happen if creditors vote NO on the proposed Scheme of Arrangement. The video breaks down the risks of rejecting the restructuring plan, including the possibility of liquidation, long delays, and reduced fund recovery for users affected by the $230 million cyberattack.

What’s at Stake?

With the voting period set from March 19 to March 28, 2025, WazirX is actively educating users on the importance of their decision. The exchange warns that a NO vote could leave them in a worse financial position. If the Scheme is rejected, liquidation could be the only alternative, which comes with significant drawbacks:

Lower recoveries: Liquidation costs could eat into available assets, reducing payouts to creditors. Estimates suggest recoveries could be only 80.4%, compared to up to 99.6% under the restructuring plan.

Years of delays: Legal proceedings and asset liquidation could take two years or more, delaying payouts to creditors indefinitely.

No market upside: Unlike the Scheme, where users could receive crypto-based distributions, liquidation would likely convert assets into fiat, potentially at unfavorable rates.

WazirX stresses that restructuring is a better alternative and warns creditors to consider the long-term impact before voting against the Scheme.

Why is the Scheme a Better Option?

A recent WazirX blog post further explains why the Scheme offers a more favorable outcome. Key benefits include:

• Immediate partial fund access: The Scheme ensures that creditors will receive a portion of their assets within 10 business days after approval. Unlike liquidation, which requires a long legal process before any funds are released, the Scheme enables a structured and faster distribution. This means creditors can regain access to some of their funds as early as April or May 2025.

• Higher overall recovery: The restructuring plan is designed to return as much as 99.6% of creditors’ claims, significantly higher than what could be expected under liquidation. A well-managed restructuring allows assets to be preserved and recovered efficiently, reducing unnecessary losses due to legal and administrative expenses.

• Potential business revival: If the Scheme is approved, WazirX intends to resume operations, which could generate additional revenue streams. These profits would then be used to buy back Recovery Tokens, offering users another layer of financial recovery. Under liquidation, the exchange would shut down permanently, eliminating any chance of long-term financial compensation.

• Market-based upside: The Scheme allows creditors to receive payouts in cryptocurrency rather than fiat, enabling them to benefit from potential future market appreciation. In contrast, liquidation would require forced asset sales, potentially at lower-than-market prices, depriving creditors of potential gains.

• Legal clarity and structured resolution: Unlike liquidation, which can be complex and drawn out in courts, the Scheme provides a court-approved, step-by-step resolution that protects creditors’ interests. It removes uncertainties around asset distribution and ensures that recoveries are transparent and equitable.

Final Call to Action

WazirX urges creditors to make an informed decision and avoid the risks of liquidation. The company emphasizes that voting YES is the best way to ensure a faster, higher recovery and a potential platform comeback.

The decision lies with the creditors, but WazirX is making its stance clear: A NO vote could mean longer waits, lower payouts, and lost opportunities. Users are encouraged to watch the video, review all available information, and vote wisely before March 28, 2025.