WazirX Gains Crucial Extension to Revive Post-Hack Restructuring Plan

By: Eva Baxter

WazirX, once the largest cryptocurrency exchange in India by trading volume, has secured a crucial extension from the Singapore High Court as it works to recover from a massive $234 million hack. This comes as the exchange struggles with user frustration and pressure from global creditors and regulators. In a statement released on social media, WazirX confirmed that the court has allowed it to present new arguments in support of a revised restructuring plan, with a temporarily extended moratorium shielding the company from creditor lawsuits.

The legal respite allows WazirX to work on its controversial Scheme of Arrangement, a court-supervised mechanism intended to reorganize its operations and settle claims from creditors and over 400,000 affected users. The exchange's troubles date back to July 2024, when hackers exploited security vulnerabilities to siphon off digital assets from customer wallets in one of Asia's largest crypto platform breaches that year.

Following the hack, attempts to reimburse users were marred by poor communication, internal conflicts with parent company Zettai Pte Ltd, and regulatory concerns about fund tracing and governance. To reassure stakeholders, WazirX has proposed transferring its primary business to Zensui Corporation, a new entity registered in Panama. This move aims to separate the exchange from Zettai’s continuing corporate issues, offering the flexibility to issue 'recovery tokens', essentially blockchain IOUs tied to unrecovered balances.

These measures, however, have failed to convince all stakeholders of a guaranteed or timely resolution, leading to over 93% of voting creditors backing the restructuring plan earlier this year. Despite this backing, the Singapore High Court recently declined final approval due to transparency and governance gaps. Without the court's green light, WazirX could face a lengthy wind-down that might not conclude until 2030. As legal experts highlight, such a situation would deplete the company’s resources and further delay user repayments. WazirX now finds itself at a critical juncture, needing to meet court demands for governance reforms while restoring customer trust in a crypto industry battered by high-profile collapses. The extension is a glimmer of hope for many, but until a final plan emerges, affected users remain locked out of their accounts.