WazirX Gets Court Lifeline After $234M Hack But Can Recovery Tokens Save It?

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WazirX, formerly India’s leading cryptocurrency exchange by trading volume, has secured a critical extension from the Singapore High Court as it grapples with the aftermath of a massive $234 million cyberattack and a turbulent year marked by growing dissatisfaction among its user base.

In a social media posting, WazirX acknowledged that the court had released a judgment that would extend the moratorium, which safeguarded the firm against law suits by creditors so that it could further argue its case to adopt a modified restructuring plan.

📢 Update on Proposed Scheme of Arrangement

The Singapore Court has granted our request to present further arguments in our application for the Court's sanction of the proposed Scheme of Arrangement. Additionally, the Court has extended the moratorium granted in HC/OA 1284/2024… pic.twitter.com/QdozZHnWVX

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) June 24, 2025

WazirX Battles Fallout from 2024 Breach

WazirX 2024 Breach

The legal reprieve offers temporary breathing space to the embattled exchange to resurrect its battered Scheme of Arrangement a court monitored restructuring framework sought to restructure its operations and claims by more than 400,000 aggrieved users all over the globe.

The troubles on the platform go back to July of 2024, when the platform hackers exploited its security infrastructure and managed to drain digital assets in customer wallets. It is one of the biggest crypto heists in Asia that year that caused a domino effect of challenges to the exchange.

Further attempts to recompense afflicted users would be accompanied by ambiguous communication and claimed internal division among its parent company Zettai Pte Ltd, as well as growing scrutiny by regulatory organizations into fund tracing processes and corporate governance procedures.

WazirX Proposes Transfer to Panama Entity

As a counter-measure, WazirX has offered to transfer its operations center to Zensui Corporation, a new firm specifically registered in Panama. The firm asserts that the transaction would protect the exchange against Zettai pending legal issues and enable the creation of subsequent issue tokens, or IOUs, called recovery tokens, which would be blockchain objects tracking unredeemed balances.

The idea behind them is to assist the users in recouping 75 to 80% of their lost assets in the long-term, depending on future earnings of the platform and the state of the general market. Nevertheless, observers have raised concerns with the mechanism being unproven and doing little in the way of guaranteeing prompt due compensation.

WazirX Survival Hinges on Court Approval

The restructuring plan was indeed met with widespread skepticism, but the plan mustered a significant amount of backing in April, with over 93 percent of the voting creditors approving the plan.

However, further approval was not given last month by the Singapore High Court citing concerns in the areas of transparency and governance and the continued existence of the company now rests in the balance.

In the absence of an approved plan, there is the likelihood that WazirX will face court-ordered liquidation, which legal experts have cautioned might take years, depreciate the value through court costs, and significantly lower the payback rates to creditors. The exchange has already warned in its correspondence that, at this proposed scenario, it may take until 2030 to reimburse the users.

WazirX Faces Last Chance to Recover

The ruling by the court on Friday is regarded as the momentous maybe the last opportunity WazirX management has to convince the court and its growing cynical followers that a controlled recovery is not lost. According to the official statement of the company, it was pointed out:

“We are awaiting the court’s directions on the next hearing and will share updates as soon as we have clarity.”

There is currently no scheduled date of the next round of proceedings, leaving thousands of users without any means of accessing their accounts almost a year after the breach. The fledgling exchange has a fine and complicated road ahead balancing the legal requirement to clean up its house with the mandatory need to rebuild confidence in a crypto industry that is still nursing shocks like recent failures FTX and Zipmex.

While the moratorium extension offers a glimmer of hope, it brings no guarantees until the court grants final approval, WazirX’s users remain locked out, their digital assets effectively frozen.

Conclusion

The next few weeks will reveal whether the venture has grounds to celebrate or explode as WazirX finds itself at the most significant legal interchange in its history. As this trust is washed away, and user funds are locked, the outcome of this case may not only define the future of this exchange, but could also set the precedent for the trust of investors in the troubled crypto industry in India over the next few years.

Summary

WazirX has been granted a time extension by the Singapore court to amend its restructuring proposal following a hack of $234 million. Which has the support of 93 per cent of creditors, would involve the issue of recovery tokens and a move to Panama-based Zensui Corporation. With no court settlement, WazirX is in danger of liquidation, with reimbursement of users possibly not coming until 2030, and the over 400,000 users involved in it remain locked out.