WazirX Users Battle Zettai Over 15 Million in Frozen Funds

The legal battle between WazirX users and Zettai Pte Ltd has escalated, with users demanding access to millions of dollars in frozen funds. The dispute centers around allegations of internal mishandling rather than an external hack, with users arguing that their digital holdings should be legally protected as client property held in trust, not company assets to be folded into corporate restructuring.

The heart of the legal dispute lies in Zettai’s move to lump all user balances, including Bitcoin, XRP, and fiat that were never affected by any hack, into a single restructuring pool alongside allegedly hacked tokens. The plaintiffs claim this move is unlawful under Singaporean law, which only permits corporate debts to be restructured, not client assets held in trust. The plaintiffs argue that user funds are not the company’s property and cannot be used to settle corporate liabilities.

Adding weight to their claims, the plaintiffs have produced on-chain evidence showing that the supposedly hacked tokens were moved using internal multi-signature wallets, a process that requires multiple internal approvals. To date, Zettai has provided no independent proof of an external hack. Users are now demanding an independent audit and full disclosure of the staff who approved the transactions, raising serious questions about the legitimacy of the company’s official narrative.

This isn’t the first legal obstacle for Zettai. Singapore’s High Court previously dismissed the exchange’s earlier restructuring plan after discovering it contained links to an undisclosed offshore shell company, further undermining user trust. The plaintiffs emphasize that even in insolvency cases, crypto assets held in trust cannot be seized to repay corporate debts. They argue that Zettai’s actions risk setting a dangerous precedent for user protections in the crypto space.

While Zettai maintains that users will be reimbursed under its revised plan, many fear the proposal still fails to meet the legal bar for protecting client funds. The upcoming court hearing will determine whether the revised plan upholds the legal safeguards for trust-held digital assets. Until then, thousands of WazirX users continue to seek restitution through the courts, hoping Singapore’s legal system will set a clear precedent that crypto holdings are client property, not a corporate asset to be bundled away.

The final court hearing is scheduled for July 17, 2025. The outcome of this hearing could set a precedent for how crypto custodians treat user assets during a crisis. If the court sides with the plaintiffs, it could be a landmark win for users who have left their tokens in someone else’s custody. However, if the filing delays the process, thousands of users could be left without their funds and without clarity on the situation. The verdict is eagerly awaited by many users, marking a critical juncture in their battle for justice.