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Key Takeaways
Court Approval Secures Recovery Path – Singapore High Court approves WazirX’s restructuring plan, allowing the exchange to resume operations and begin fund distributions.
Creditor Support Was Crucial – Over 95% of creditors backed the revised plan, enabling the next phase of WazirX’s recovery.
Milestone for Users and Exchange – The decision marks a key step in returning funds to more than 150,000 affected users and restoring trust in the platform.
In a significant development for the Indian cryptocurrency exchange WazirX, the Singapore High Court has approved its restructuring plan following a massive cyberattack in July 2024 that resulted in the theft of approximately $234.9 million in digital assets.
Overview
The court’s ruling follows weeks of creditor approval for a revised plan, enabling WazirX to move forward with its recovery, including distributing funds via tokens and restarting exchange operations.
WazirX founder Nischal Shetty expressed gratitude for the support received during this challenging period, stating,
“Thank you to everyone who supported this difficult phase of WazirX. The Singapore High Court has approved the scheme.”
This approval marks a crucial step towards restoring operations and compensating affected users.
The 2024 Hack and Its Aftermath
On July 18 2024, WazirX’s multisig wallet was compromised, leading to the unauthorised transfer of nearly $235 million worth of cryptocurrencies. Investigations attributed the breach to the North Korean hacker group Lazarus, which exploited vulnerabilities in the wallet’s smart contract. Following the incident, WazirX halted both crypto and Indian rupee withdrawals, leaving over 150,000 users in limbo.
Court Approval and Next Steps
After a series of legal proceedings, the Singapore High Court has sanctioned WazirX’s restructuring plan. The plan received overwhelming support from creditors, with over 95% voting in favour.
Under the approved scheme, repayments will be managed by Zanmai India, a subsidiary regulated by India’s Financial Intelligence Unit, rather than the Singapore-based parent company, Zettai Pte Ltd. Additionally, a new entity, Zensui Corporation, has been established in Panama to oversee operations previously managed from Singapore.
Implications for Users and the Crypto Industry
The court’s approval is expected to facilitate the resumption of WazirX’s operations and initiate the process of compensating affected users. While the exact timeline for fund distribution remains to be detailed, the approval provides a pathway for recovery. This case highlights the importance of robust security measures and transparent operational practices in the cryptocurrency industry.
As WazirX moves forward with its restructuring efforts, the focus will be on rebuilding trust with users and ensuring compliance with regulatory standards. The developments in this case will likely serve as a reference point for other exchanges and stakeholders in the crypto ecosystem.