Singapore Court's WazirX Ruling Sets Precedent for Global Crypto Insolvency

The Singapore High Court has approved the debt restructuring plan of WazirX, the Indian cryptocurrency exchange that suffered a $234.9 million hack in July 2024. The ruling, announced on October 13, 2025, clears the path for the exchange to begin repaying users and resuming operations after months of legal battles and creditor negotiations. The approval follows overwhelming support from creditors, with over 95% of participating creditors backing the revised restructuring proposal in August.

The hack, attributed to North Korea's Lazarus Group, left WazirX insolvent and forced it to freeze withdrawals. The exchange's parent company, Zettai Pte Ltd, based in Singapore, initiated a court-supervised restructuring under the Singapore Insolvency, Restructuring and Dissolution Act of 2018. The initial restructuring plan was rejected in June 2025 due to regulatory concerns over the distribution of recovery tokens. The revised proposal, which routes repayments through WazirX's Indian entity Zanmai Labs, secured stronger creditor support.

Under the approved plan, users will recover up to , split between liquid crypto or cash (52%) and recovery tokens tied to WazirX's future earnings (48%). The first phase of token distributions is expected within 10 business days of the court's approval, though experts caution that full withdrawals may take two to three months. CEO Nischal Shetty emphasized the decision as a "next phase" for the exchange, thanking users for their "support and love".

Indian crypto enthusiasts have reacted with cautious optimism. Influencers like Pushpendra Singh and Kashif Raza highlighted the need for swift withdrawals ahead of the Hindu festival of Diwali on October 20. Meanwhile, WazirX's native token, WRX, surged 21% following the court's approval, reflecting renewed investor confidence.

The restructuring also includes plans to launch a decentralized exchange (DEX) and implement periodic buybacks of recovery tokens using future profits. However, critics argue the plan shifts losses to users by pegging repayments to July 2024 prices, causing them to miss out on gains from the subsequent crypto bull run.

The case has exposed regulatory gaps in crypto custody laws. Singapore's Monetary Authority (MAS) had previously mandated that crypto firms cease overseas digital token services by June 30, 2025, prompting WazirX to shift operations to a Panama-based entity, Zensui Corporation. This move, while legally permissible, has raised questions about jurisdictional compliance and user protections.

The court's approval also sets a precedent for cross-border crypto insolvency proceedings. Legal experts note that Singapore's structured approach-prioritizing user claims through a court-supervised scheme-offers a model for jurisdictions lacking clear crypto regulations. However, challenges remain in enforcing offshore liabilities and ensuring transparency in token-based recoveries.

With the restructuring plan finalized, WazirX now faces the task of executing payouts while rebuilding trust. The exchange has not yet disclosed a definitive timeline for withdrawals, but the court's ruling provides a legal framework to prevent further delays. If successful, the plan could stabilize WazirX's operations and position it to reclaim its role as a major player in India's crypto market.

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[1] WazirX restructuring gets Singapore court nod, user fund recovery revealed (https://www.thestreet.com/crypto/business/wazirx-restructuring-court-approval)

[2] WazirX Wins Court Nod in Singapore for Debt Restructuring ... (https://finance.yahoo.com/news/wazirx-wins-court-nod-singapore-072641996.html)

[4] WazirX Secures Singapore Court Approval to Repay Users After ... (https://cointelegraph.com/news/wazirx-court-approval-user-repayments-234m-hack)

[5] WazirX Users Set for Partial Refunds as Singapore Court Approves ... (https://www.ccn.com/news/crypto/wazirx-users-set-for-partial-refunds-as-singapore-court-approves-restructuring-plan/)

[11] Singapore Court Approves WazirX Restructuring Plan (https://financefeeds.com/singapore-court-approves-wazirx-restructuring-plan/)

[13] WazirX Restructuring 2025: Token Recovery & Panama Move (https://thereviewhive.blog/wazirx-restructuring-2025-token-recovery-panama-shift/)