Court Approves WazirX's Token Plan, Users Get 85% Recovery as Trust Wanes
Singapore High Court Approves WazirX Restructuring Plan, Paving Way for User Repayments After $234M Hack
The Singapore High Court has granted final approval to WazirX's debt restructuring plan, marking a pivotal step in the Indian cryptocurrency exchange's recovery from a devastating $234 million hack in July 2024. The court's decision follows months of legal negotiations and revisions to the initial proposal, which was rejected in June due to regulatory concerns over token distributions. With the green light, WazirX can now proceed to distribute recovery tokens and resume operations, offering hope to over 150,000 affected users who have endured more than a year of uncertainty[1].
The hack, attributed to North Korea's Lazarus Group, exploited a Safe Multisig wallet breach, prompting WazirX to halt withdrawals and initiate a complex legal battle to safeguard assets. The revised restructuring plan, supported by 95% of creditors in August, shifted repayment responsibilities to WazirX's Indian subsidiary, Zanmai Labs, aligning with regulatory requirements in India and circumventing Singapore's stringent rules for digital token service providers[2]. This adjustment addressed the court's earlier reservations, enabling the approval of a scheme that aims to return up to 85% of stolen funds based on pre-hack valuations[3].
Under the court-supervised Scheme of Arrangement, users will receive recovery tokens tied to future profits and asset recoveries. The first distributions are expected within 10 business days of the court's ruling, according to WazirX founder Nischal Shetty, who expressed gratitude for the community's support on X. However, George Gwee of restructuring firm Kroll, which oversees the process, cautioned that full repayments could take two to three months, citing logistical challenges[4]. The exchange has not yet set a definitive timeline, though Shetty optimistically suggested operations could resume swiftly post-approval[5].
The restructuring avoids liquidation, which could have delayed recoveries until 2030, and establishes a framework for equitable asset distribution. Zettai Pte Ltd., WazirX's Singapore-based parent company, secured a moratorium to prevent jurisdictional disputes, ensuring uniform treatment of Indian and international users. The plan also created a Panamanian subsidiary, Zensui Corporation, to manage global operations outside India's regulatory scope[6].
User reactions remain mixed. While many welcomed the approval as a resolution to a prolonged crisis, others criticized the extended repayment timelines and the use of tokens instead of direct refunds. A group of Indian users had previously challenged WazirX's terms of service in the Supreme Court, though the petition was dismissed for lacking jurisdiction over crypto policy[7].
With the court's backing, WazirX now faces the dual challenge of executing the repayment plan while rebuilding trust. The exchange's native token, WRX, saw a 21% surge following the news, reflecting renewed investor confidence[8]. Yet, the road to full recovery remains fraught, as international investigations into the stolen funds continue and regulatory scrutiny of crypto platforms intensifies.
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