Singapore Court Approves WazirX's Plan, Cementing Crypto Insolvency Hub Status
Singapore's High Court has approved WazirX's debt restructuring plan, marking a pivotal step in the Indian crypto exchange's recovery from a $234 million hack last year. The court's decision, announced on October 13, 2025, follows months of negotiations with creditors and a revised proposal that secured over 95% support in a second voting round[2]. The ruling allows WazirX to proceed with a structured repayment process, offering affected users the chance to recover up to 85% of their assets, based on valuations from the date of the hack[3].
The hack, attributed to North Korea's Lazarus Group[1], exploited vulnerabilities in WazirX's multisig wallet system, leading to the theft of $234.9 million in July 2024. The attack froze withdrawals and trading, pushing the exchange toward insolvency. WazirX's initial restructuring plan was rejected by the court in June 2025 due to regulatory concerns over token distributions[2]. The revised proposal, which routes repayments through its Indian entity Zanmai Labs, addressed these issues and gained broader creditor support[3].
Under the approved plan, WazirX will distribute 55% of recovered funds as liquid crypto or cash and 48% in recovery tokens tied to the exchange's future earnings[5]. The first round of token distributions is expected within 10 business days of the court's approval, with full repayment timelines spanning up to three years[4]. CEO Nischal Shetty emphasized the plan's focus on transparency and user trust, stating, "Now we set out on the next phase to work hard and create value for everyone"[1].
The restructuring process has been contentious. Critics argue that the plan prioritizes speed over maximum recovery, as users will receive payouts based on July 2024 valuations-missing out on gains from the subsequent crypto bull market[5]. Additionally, the use of recovery tokens, which derive value from WazirX's future profits, introduces uncertainty for users. Despite these concerns, over 149,000 creditors with $206.9 million in claims supported the revised plan[3].
The court's approval also highlights Singapore's role as a regulatory hub for crypto insolvency. By leveraging Singapore's Insolvency, Restructuring and Dissolution Act of 2018, WazirX secured a moratorium to prevent conflicting legal claims across jurisdictions[3]. This approach avoided a prolonged liquidation process, which could have delayed recoveries until 2030. The case is seen as a potential precedent for how crypto exchanges can navigate cross-border legal challenges[2].
Indian users, however, remain divided. While some welcome the progress, others criticize the timeline and partial recovery. Influencer Kashif Raza noted the market's recovery since the hack and urged faster withdrawals ahead of the Hindu festival of Diwali on October 20[1]. Meanwhile, legal experts warn that the restructuring plan may not fully address regulatory gaps in India's crypto framework[2].
WazirX's path forward includes resuming trading and withdrawals, with the exchange planning to launch a decentralized exchange (DEX) as part of its recovery strategy[5]. The outcome of this restructuring will likely influence how other crypto platforms handle liquidity crises, particularly in regions with evolving regulatory landscapes[2].
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