Singapore Court Rejects WazirX Restructuring Plan Delaying 85% Repayment

WazirX, a prominent Indian cryptocurrency exchange, has encountered a significant legal hurdle as the Singapore High Court rejected its proposed restructuring plan. This decision, delivered by judicial commissioner Kristy Tan, has delayed the repayment process that was initially scheduled to commence as early as April 2025. The court's ruling cited a lack of transparency from WazirX's parent entity, Zettai Pte Ltd, which had submitted the restructuring proposal in November. The plan aimed to compensate creditors for 85% of their locked funds, but the court's rejection has left these repayments in limbo.

WazirX, which serves a substantial user base, has announced its relocation to Panama under a new company name, Zensui. This move follows the exchange's suspension of trading and the locking of nearly $250 million in user funds after a hack in July 2024. The court's decision has complicated WazirX's efforts to navigate the legal and regulatory landscape, as it seeks to address the concerns raised by the Singapore High Court.

The court's rejection of the restructuring plan was based on several factors, including the failure of Zettai Pte Ltd to disclose its Panama subsidiary. This lack of transparency has raised questions about the company's intentions and its commitment to returning user funds. The court's decision has elicited mixed reactions from users, with some expressing satisfaction over the court's verdict and others advocating for stricter regulations in India to prevent similar incidents in the future.

WazirX has stated that it will appeal against the court's decision and is currently evaluating all available legal options. The exchange remains committed to complying with all legal and regulatory processes and has expressed its intent to begin fund distributions as soon as possible. However, the next steps for the reimbursements remain undisclosed, leaving users in a state of uncertainty.

The court's ruling has also underscored the challenges faced by cryptocurrency exchanges in navigating the regulatory landscape. The absence of a clear regulatory framework for cryptocurrencies in many regions has created a vacuum that enables fraud and manipulation. The Singapore High Court's decision serves as a reminder of the importance of transparency and accountability in the cryptocurrency industry, and the need for robust regulatory measures to protect users and investors.