tl;dr
WazirX, once India’s largest crypto exchange, has obtained an extension from Singapore’s High Court to present a revised restructuring plan following a $234 million hack. The court extended a moratorium protecting WazirX from creditor lawsuits, allowing time to reorganize and address claims from ove...
WazirX, once India’s largest crypto exchange, has secured a crucial extension from Singapore’s High Court to present a revised restructuring plan after a $234 million hack. The court extended a moratorium protecting WazirX from creditor lawsuits, allowing the company time to reorganize its operations and address claims from over 400,000 affected users worldwide.
The breach in July 2024 exploited security flaws, draining digital assets from customer wallets and triggering internal disputes along with regulatory concerns. WazirX proposed transferring its core business to a new Panama-based entity, Zensui Corporation, aiming to distance itself from complications linked to its parent firm, Zettai Pte Ltd. It also plans to issue recovery tokens, blockchain IOUs pegged to unrecovered balances, designed to help users gradually reclaim between 75% and 80% of their lost crypto, with payouts dependent on future market conditions and platform revenue.
Despite uncertainties surrounding the effectiveness and timeliness of recovery tokens, more than 93% of creditors supported the restructuring plan in an April vote. However, the Singapore High Court withheld final approval due to concerns around transparency and governance. Without court approval, WazirX faces the risk of forced liquidation, which could drag on for years, incur hefty legal fees, and reduce recovery amounts—potentially delaying repayments until 2030.
Friday’s extension presents a last opportunity for WazirX's leadership to convince the court and its anxious community that a structured recovery remains viable. The exchange stated it is awaiting further court directions and will provide updates when they are available. Meanwhile, thousands of users remain locked out of their accounts nearly a year after the breach, as the company navigates the challenge of restoring customer trust amidst ongoing industry turmoil from high-profile failures like FTX and Zipmex.
For users, the extension offers hope but no guarantees. Until the court grants final approval, their crypto assets remain inaccessible, highlighting the fragile balance between legal processes, regulatory scrutiny, and efforts to rebuild confidence in a shaken crypto market.