WazirX, Singapore HC Rejects WazirX Restructuring Plan, crypto hack, Zettai Pte Ltd, Zensui Corporation – In a major blow to India’s largest crypto exchange, the Singapore High Court rejected WazirX’s restructuring plan on June 4, 2025, leaving 4.4 million users grappling with uncertainty after a $235 million hack in July 2024. This decision stalls fund recovery efforts, raises questions about WazirX’s transparency, and highlights the need for stronger crypto regulations in India. Startup INIDAX explores the court’s ruling, its impact on users, and what lies ahead for WazirX in this detailed analysis.
Introduction: WazirX’s Recovery Hopes Dashed
On June 4, 2025, WazirX, India’s leading cryptocurrency exchange, faced a significant setback when the Singapore High Court rejected its restructuring plan. The decision has left 4.4 million Indian users, affected by a massive $235 million hack in July 2024, in limbo, with no clear timeline for recovering their funds. The court’s ruling, driven by concerns over transparency and WazirX’s undisclosed move to Panama, has sparked widespread frustration. As Startup INIDAX reports, this development not only jeopardizes WazirX’s future but also underscores the urgent need for robust crypto regulations in India. Let’s dive into what happened, why it matters, and what’s next for WazirX and its users.
Why Did Singapore HC Reject WazirX’s Plan?
The Court’s Ruling Explained
The Singapore High Court’s rejection of WazirX’s restructuring plan came as a shock to the crypto community. Submitted by WazirX’s Singapore-based parent company, Zettai Pte Ltd, in November 2024, the plan aimed to address the fallout from the July 2024 hack that wiped out nearly 45% of the platform’s assets. Despite securing approval from 93% of creditors in April 2025, the court, led by Judicial Commissioner Kristy Tan, declined to sanction the plan on June 4, 2025. The ruling cited critical issues with WazirX’s transparency and compliance with regulatory standards.
WazirX responded via a post on X, stating, “We are disappointed by the court’s decision but remain committed to our users and legal compliance.” The rejection has halted the platform’s recovery efforts, leaving users anxious about their frozen funds. For Startup INIDAX, this ruling highlights the challenges crypto exchanges face in navigating complex legal landscapes.
Transparency and Regulatory Concerns
The court’s decision hinged on WazirX’s lack of transparency, particularly its failure to disclose the incorporation of Zensui Corporation in Panama. Additionally, Zettai Pte Ltd, WazirX’s parent, is not registered with India’s Financial Intelligence Unit (FIU-IND), raising questions about the plan’s legitimacy in India. The court also scrutinized WazirX’s compliance with Singapore’s Financial Services and Markets (FSM) Act 2022, which requires crypto exchanges to obtain a Digital Token Service Provider (DTSP) license by June 30, 2025.
This regulatory misstep has put WazirX in a precarious position. As Startup INIDAX has noted in its coverage of the crypto sector, transparency and adherence to local laws are non-negotiable for building user trust. The court’s rejection serves as a reminder that even well-intentioned plans can falter without clear communication and regulatory alignment.
Recapping the WazirX $235M Hack
How the Hack Affected 4.4 Million Users
In July 2024, WazirX suffered a catastrophic cyberattack, allegedly orchestrated by North Korea’s Lazarus Group, resulting in the loss of $235 million in crypto assets. The hack targeted a multisig wallet managed with Liminal, leading WazirX to suspend trading and withdrawals. This affected over 4.4 million Indian users, many of whom lost significant portions of their portfolios. The incident sent shockwaves through India’s crypto community, with users voicing their anger on platforms like X.
One user, Priya Sharma, posted, “WazirX’s lack of transparency cost us all. If they had been upfront with the court, we wouldn’t be stuck like this.” The hack exposed vulnerabilities in WazirX’s security protocols and sparked investigations by India’s Financial Intelligence Unit, Intelligence Bureau, and CERT-In. For users, the financial and emotional toll has been immense, with many still awaiting clarity on their funds.
Zettai Pte Ltd’s Role in the Crisis
Zettai Pte Ltd, WazirX’s Singapore-based parent, stepped in to manage the crisis. In August 2024, Zettai secured a four-month moratorium under Singapore’s Insolvency, Restructuring, and Dissolution Act 2018 to develop a restructuring plan. The plan proposed distributing $284 million in liquid assets and issuing recovery tokens to creditors, with a target to resume operations by April 2025. However, the court’s rejection has derailed this timeline, forcing WazirX to explore alternative recovery strategies.
WazirX’s Panama Pivot: A Risky Move?
Zensui Corporation and Its Purpose
In a surprising development, WazirX revealed it had incorporated Zensui Corporation in Panama on March 10, 2025, as a fallback to continue operations without a Singapore license. This move was prompted by the impending enforcement of Singapore’s FSM Act 2022, which mandates licensing for crypto exchanges. Panama’s lenient regulatory environment offered WazirX a way to sidestep these requirements, but the court viewed this as a lack of transparency, contributing to the plan’s rejection.
Startup INIDAX believes this move could backfire. While Panama provides regulatory flexibility, it risks eroding user trust, especially among Indian investors who value accountability. Social media reactions on X reflect this sentiment, with users like Rohan K. calling it “a shady move to dodge regulations.” Zensui Corporation’s role in WazirX’s future remains unclear, but it has certainly complicated the platform’s recovery efforts.
Navigating Singapore’s FSM Act 2022
Singapore’s FSM Act 2022 aims to regulate crypto exchanges by requiring a DTSP license, effective June 30, 2025. For WazirX, this meant Zettai Pte Ltd needed to comply or cease operations outside Singapore. The court’s scrutiny of Zettai’s unregistered status in India and its Panama subsidiary highlighted the challenges of operating across jurisdictions. This regulatory hurdle underscores the need for Indian exchanges to align with global standards, a topic Startup INIDAX has covered extensively in its crypto news updates.
What’s Next for WazirX Users?
Delays in Fund Recovery
The rejection of WazirX’s restructuring plan has left 4.4 million users facing prolonged delays in recovering their funds. The plan promised to return up to 85% of frozen assets through token rebalancing and recovery tokens. Now, with the moratorium ending on June 6, 2025, users may not see distributions for months, or even years if WazirX moves to liquidation. The company has assured users that their Net Liquid Platform Assets (NLPA) remain secure, but the lack of a clear timeline has fueled frustration.
For users like Ankit, who lost ₹5 lakh in the hack, the wait is agonizing. “I trusted WazirX with my savings, and now I don’t know if I’ll ever get them back,” he shared on X. Startup INIDAX urges users to stay informed and explore all available options, including legal recourse, to protect their interests.
Legal Options in India
With the Singapore moratorium expiring, Indian users may now pursue litigation to recover their funds. However, India’s lack of specific crypto regulations complicates this process. Former Supreme Court judge BN Srikrishna noted that Indian laws don’t explicitly govern crypto platforms, which could hinder legal proceedings. While WazirX’s Indian entity, Zanmai Labs, is registered with FIU-IND, Zettai’s unregistered status adds complexity. Users are already discussing class-action lawsuits on X, signaling growing unrest.
WazirX’s Response: Appeal and Relaunch Strategy
Plans for a Decentralized Exchange (DEX)
Despite the setback, WazirX is determined to move forward. The company plans to appeal the Singapore High Court’s decision and is exploring alternative legal pathways. Additionally, WazirX aims to relaunch its platform by February 2025, introducing a decentralized exchange (DEX), crypto staking, an OTC desk, and futures trading. These features are intended to generate revenue to fund recovery token buybacks, offering users a path to recoup losses. Co-founder Nischal Shetty remains optimistic, stating in a recent town hall, “Our goal is to help users recover 90-145% of their funds within three years.”
Recovery Tokens and Trading Revival
WazirX’s proposed recovery tokens are central to its strategy. These tradable tokens would allow users to benefit from market gains, particularly in a bullish crypto environment. The company plans to use profits from its relaunched platform to buy back these tokens over 36 months. However, the court’s rejection has cast doubt on this plan’s viability, and users remain skeptical. Startup INIDAX will continue to monitor WazirX’s progress and provide updates as the situation evolves.
India’s Crypto Landscape: Time for Change?
The Push for Crypto Regulations
The WazirX hack and the subsequent court rejection have amplified calls for stronger crypto regulations in India. Sumit Gupta, WazirX’s co-founder, emphasized on LinkedIn, “The WazirX case shows why India needs clear crypto laws to protect users.” Without a regulatory framework, users remain vulnerable to hacks and mismanagement. Startup INIDAX has long advocated for balanced regulations that foster innovation while ensuring consumer safety, and this incident reinforces that need.
Lessons for Indian Crypto Exchanges
The WazirX saga offers critical lessons for India’s crypto ecosystem. Exchanges must prioritize transparency, robust security, and regulatory compliance to maintain user trust. For users, diversifying investments and using hardware wallets can reduce risks. As the crypto market grows, platforms like Startup INIDAX will continue to educate investors and track regulatory developments to empower the community.
Conclusion: WazirX Faces a Tough Road Ahead
The Singapore High Court’s rejection of WazirX’s restructuring plan has left 4.4 million Indian users in a state of uncertainty. While WazirX plans to appeal and relaunch with new features like a DEX and recovery tokens, the path to recovery is fraught with challenges. The Panama move and regulatory scrutiny in Singapore highlight the complexities of the global crypto landscape. For Indian users, this saga underscores the risks of unregulated markets. Startup INIDAX remains committed to providing timely updates and insights to help users navigate this evolving situation.
1 comment
Hiya, I am really glad I’ve found this information. Today bloggers publish only about gossips and web and this is really frustrating. A good site with interesting content, this is what I need. Thank you for keeping this web-site, I’ll be visiting it. Do you do newsletters? Cant find it.