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WazirX Wins Singapore Court Nod to Repay Users After $230M Hack: Key Updates

Updated: 29-01-2025, 10.08 AM

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WazirX Wins Singapore Court Nod

In a landmark decision, the Singapore High Court has greenlit Indian cryptocurrency exchange WazirX to proceed with a repayment plan for users affected by a devastating $230 million hack in July 2024. The ruling marks a critical milestone for over 500,000 Indian investors whose funds were frozen after North Korean hackers linked to the Lazarus Group breached the platform’s multi-signature wallet.

With Bitcoin’s recent surge to $100,000 and India’s crypto tax policies under scrutiny, WazirX’s recovery efforts have become a litmus test for trust in homegrown exchanges. This article unpacks the latest developments, including frozen asset recoveries, court-approved timelines, and the platform’s controversial path to revival.

The Hack: A $230M Blow to India’s Crypto Ecosystem

On July 18, 2024, WazirX suffered one of India’s largest crypto heists when attackers exploited vulnerabilities in its multi-signature wallet managed by Liminal Custody. Over $230 million (₹2,000 crore) was siphoned, impacting 45% of the exchange’s holdings. While Liminal denied responsibility, forensic audits revealed compromised WazirX devices as the entry point.

The stolen funds, laundered via Tornado Cash, were traced to the Lazarus Group—a North Korean cybercrime syndicate notorious for high-profile crypto thefts. Indian authorities arrested one suspect, Masud Alam, but the mastermind remains at large.

2. Singapore Court Approves Restructuring: What’s Next?

On January 23, 2025, the Singapore High Court authorized WazirX’s parent company, Zettai, to convene a creditor meeting and implement a Scheme of Arrangement. Key components include:

  • Debt Restructuring: Creditors will vote on a plan to redistribute $565.7 million in liquid assets.
  • Recovery Tokens (RTs): Users receive RTs proportional to losses, exchangeable for recovered funds or future profits.
  • Platform Revival: WazirX aims to relaunch with a decentralized exchange (DEX) and profit-sharing model.

If approved, 48% of claims will be settled within 10 business days, with withdrawals tentatively resuming by mid-April 2025.

3. Frozen Funds & Recovery Progress

WazirX froze $3 million in stolen USDT on January 17, 2025, collaborating with global agencies like Kroll and CERT. Jason Kardachi, a restructuring expert, emphasized the use of “on-chain forensics” to track the remaining assets. However, only $6 million in Ether remains unlaundered, complicating recovery efforts.

WazirX faces lawsuits from rivals like CoinSwitch and a class action demanding $600,000 in damages. Critics accuse the exchange of opaque communication, notably after introducing a “Socialized Loss Strategy” that prioritized asset rebalancing over withdrawals.

Binance’s delisting of WazirX’s native WRX token in December 2024 further eroded confidence, citing “operational shortcomings”.

5. The Road Ahead: Decentralized Exchange & Regulatory Lessons

To rebuild trust, WazirX plans a user-controlled DEX by late 2025, eliminating intermediary risks. Founder Nischal Shetty stated, “We want to make self-custody as simple as centralized trading”. The exchange also aims to introduce staking, futures trading, and an OTC desk to boost revenue.

Meanwhile, the incident has sparked debates about India’s regulatory gaps. Unlike Singapore, India lacks frameworks for crypto insolvencies, leaving users at exchanges’ mercy 

Conclusion

WazirX’s court-approved restructuring offers a glimmer of hope for Indian crypto investors, but challenges persist. From tracing stolen funds to navigating legal crossfires, the exchange’s revival hinges on transparent execution and regulatory collaboration. As the March 2025 creditor vote looms, users are advised to stay informed and weigh risks before engaging with recovery tokens. For India’s crypto landscape, this saga underscores the urgent need for robust safeguards against evolving cyber threats.

FAQs

When will WazirX resume withdrawals?

Withdrawals are expected by mid-April 2025, pending court approval of the Scheme of Arrangement.

What are Recovery Tokens (RTs)?

RTs represent users’ claims and can be exchanged for recovered assets or future profits from WazirX’s DEX 15.

How much stolen money has been recovered?

3million in USDT has been frozen, with 3million in USDT has been frozen, with 6 million in Ether still traceable.

Why did Binance delist WRX?

Binance cited operational concerns, damaging WazirX’s market reputation.

Are Indian courts involved in the case?

Yes, the Delhi High Court ordered a fresh probe into the hack, alongside Singaporean proceedings

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