Recent restructuring efforts at WazirX have sparked concern among creditors, drawing parallels to the unsuccessful restructuring of Vauld that occurred over two years ago. Both companies enlisted the services of Kroll, a renowned international restructuring firm. This has led to increased speculation about potential mismanagement, lack of transparency, and the long-term implications for creditors.
The Vauld Experience: A Forewarning for WazirX
The restructuring strategy implemented by Vauld, under the leadership of Darshan Bathija and with the assistance of Kroll, left creditors dissatisfied. The plan involved locking token values during a market downturn, which allowed Kroll and Vauld to achieve high recovery rates when the market rebounded. Although Vauld managed to refund approximately $100 million to creditors, they exaggerated this figure to $200 million during a market surge to obscure their actual losses.
Additionally, Vauld’s creditors faced other challenges. Claims could only be filed in terms of frozen USD values, discouraging requests based on real token value declines. This situation intensified frustration over mismanaged funds, the absence of audits, and the inability to recover $6-$8 million lost through hacks before insolvency.
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WazirX’s Strategic Restructuring: A Cause for Concern
WazirX’s creditors have not forgotten the past as CEO Nischal Shetty recently announced a restructuring plan, once again involving Kroll. Questions linger about whether Kroll will accurately assess the extent of the issues and reduce users’ claims or if WazirX will continue to present minor achievements as significant victories.
When comparing Vauld and WazirX, it is crucial to consider the exposure faced by creditors, particularly as WazirX undergoes its restructuring process. Creditors, who have suffered losses, are calling for increased transparency, a genuine commitment to recovering lost funds, and a departure from the ineffective strategies that left Vauld users disappointed.
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