On October 13, 2025, the Singapore High Court sanctioned a creditor-backed scheme that clears the path for WazirX to reopen within 10 business days and begin distributing funds to victims of the July 2024 breach. The decision caps a 15-month crisis that combined a state-grade hack, cross-border legal fights and intense regulatory scrutiny, and it marks a test case for how courts can manage large crypto failures without sending users into years-long insolvency proceedings.
The hack, the fallout and why restructuring mattered
On July 18, 2024, attackers exploited a Gnosis Safe multisignature wallet used by WazirX and drained roughly $234.9 million in ERC-20 assets. Forensic reports and cybersecurity firms concluded the exploit involved an attacker-controlled smart contract that effectively replaced the multisig protections by exploiting a discrepancy in a third-party custody interface; the stolen assets were then routed through mixers and DEXs. The breach suspended trading and withdrawals, prompting a global freeze effort and a wave of litigation from users and counterparties.
WazirX’s ownership and operational map Zettai Pte Ltd (Singapore parent), Zanmai Labs (Indian operating arm) and the later-disclosed Zensui (Panama) entity compounded the problem. Jurisdictional complexity amplified creditor anxiety: users in India were voting on a scheme governed by Singapore law while fiat and brokerage disputes played out in Indian courts. Early attempts at a scheme ran into judicial scepticism over transparency and offshore structures, forcing a rework that led to the August 2025 revote that won overwhelming support.
What the court approved (and how the recovery works)
The sanctioned plan is a hybrid recovery blending immediate liquidity with future claims:
- 55% immediate liquid distribution — delivered as stablecoins and listed tokens available for trading or withdrawal after the platform restart.
- 45% Recovery Tokens (RTs) — tradable instruments representing claims on future buybacks funded by platform profits and new revenue streams.
Creditors overwhelmingly endorsed the revised plan: in August 2025, 95.7% of participating creditors by number (143,190 creditors) and 94.6% by value ($195.7 million in claims) voted for the amended scheme, a signal that most preferred faster, partial recovery over protracted liquidation. The Singapore High Court’s sanction makes the scheme legally binding, including for dissenting creditors, once the order is registered with ACRA and operational conditions are met.
What this means in practice: users should expect a phased relaunch with KYC/AML checkpoints, a published supported-asset list, and managed withdrawal queues to preserve liquidity. But the plan’s success depends on three variables: the market value of distributed assets at restart, RT liquidity and WazirX’s ability to generate sustained revenue for buybacks.
Why is the direct recovery of stolen funds unlikely
A key limiting factor is that the bulk of the stolen assets were effectively laundered through Tornado Cash and other mixers. Investigators and blockchain trackers repeatedly concluded that obfuscation tactics used after the breach have made tracing and on-chain recovery practically impossible at scale. That reality forced the rescue architecture to rely on remaining company reserves, new custody arrangements and operational revenue rather than reclamation of the laundered $234.9m. The restructuring is therefore a pragmatic socialisation of loss, painful but faster than liquidation timelines measured in years.
Parallel litigation and the emerging legal precedent
WazirX’s restart coincides with a consequential domestic ruling: on October 7, 2025, the Bombay High Court dismissed Zanmai Labs’ appeal and upheld an arbitration order directing the operator to provide ₹45.38 crore in bank guarantees to CoinSwitch, a broker whose assets were frozen on WazirX after the hack. The judgment stressed custodial accountability that assets held under custody agreements make the custodian liable irrespective of third-party relationships and rejected Zanmai’s argument that liability should lie with Binance or other parties. That decision reinforces legal protections for counterparties and limits the scope for exchanges to deflect responsibility by pointing to complex corporate arrangements.
Taken together, the Singapore sanction and the Bombay High Court ruling create a two-track precedent: structured, court-supervised restructurings can rescue mass creditor pools more quickly, while domestic courts will still enforce custodial duties and protect individual counterparties where contracts demand it. Regulators and firms will watch whether this hybrid model can be reconciled with stricter custody standards and AML requirements.
Security fixes and the BitGo pivot
To blunt future risk, Zettai selected BitGo Trust Company as custodian in March 2025, a move intended to separate signing infrastructure from operational access and to bring institutional controls, insurance coverage and audited custody standards back into the system. BitGo’s track record with other large creditor distributions (and its regulated trust structure) helps the narrative that WazirX’s assets will be managed under recognised institutional safeguards post-restart. But technical hardening alone won’t restore trust; transparent audits, ongoing forensic disclosure and robust governance will be needed to persuade wary users.
Market reaction and user sentiment
Market signals were immediate but measured. WRX token prices and on-chain indicators showed a spike in optimism after the court sanction; yet social media and user forums reflected a mix of relief and scepticism. Two tensions dominate sentiment: some creditors argue recoveries should account for bull-market gains since July 2024, while others worry that RTs may trade at heavy discounts and that buybacks could be slow. Execution risk operational delays, further regulatory holds, or adverse court orders in India could turn hope into a drawn-out process.
Broader implications: playbook or one-off?
WazirX’s fast-tracked restructuring, 15 months from hack to court sanction, will be studied as a potential playbook for future exchange crises: rapid creditor engagement, a hybrid distribution model, and judicial supervision to avoid decade-long liquidations like Mt. Gox. At the same time, the episode underscores structural weaknesses: offshore subsidiaries creating opacity, pre-existing enforcement probes that erode user confidence, and the limits of on-chain recovery when mixers are used. Policymakers globally will likely draw three lessons: tighten custody standards, mandate clearer corporate disclosures for user funds, and harmonise cross-border enforcement mechanisms for crypto assets.
Author’s thoughts
WazirX’s redemption arc is pragmatic rather than idealistic. The sanctioned restructuring recognises an uncomfortable truth: when stolen assets disappear into privacy tools, the only feasible route to creditor relief is through disciplined, legally supervised reconstruction of the business and its balance sheet. That makes the success of this exercise a test of institutional competence, whether legal muscle, improved custody and crisp execution can restore the social contract between a centralised exchange and its users. If it works, courts may have invented a middle path between messy liquidations and unchecked private settlements. If it falters, however, the episode will become an argument for decentralised custody and stricter pre-emptive regulation.
Conclusion
The Singapore High Court’s approval of the WazirX restructuring is a landmark moment: it offers a route to partial restitution for 4.3 million affected users, establishes a legal framework for hybrid recovery, and sends a message that courts can act quickly in crypto insolvencies. Yet success is not guaranteed. The laundered portion of the $234.9m will likely remain unrecoverable; the outcome now rests on execution of transparent distributions, credible custody operations via BitGo, and continued judicial clarity in India on custodial duty. For users, regulators and industry participants, the WazirX restructuring is neither a panacea nor a precedent for complacency; it is an experiment in how legal structures can impose order on a market still learning the costs of centralisation.
