“The court recognizes the exceptional circumstances surrounding the WazirX cyber-attack and affirms CoinSwitch’s claim to recover its assets,” the judgment stated, emphasizing the need for strong custodial safeguards in crypto exchanges.
Earlier tribunal rulings in December 2024 and March 2025 had directed WazirX to either provide bank guarantees or deposit equivalent funds in escrow to protect CoinSwitch’s claim. WazirX’s attempt to overturn these directives was firmly rejected.
How the $234 Million WazirX Hack Occurred
The July 2024 cyber-attack remains one of India’s largest cryptocurrency breaches. Hackers exploited vulnerabilities in WazirX’s multi-signature wallets, reportedly managed by Liminal, resulting in losses exceeding $234 million in ERC-20 tokens. Investigations linked the breach to the notorious cybercrime syndicate, Lazarus Group.
CoinSwitch, one of WazirX’s institutional partners, reportedly lost nearly 40.5% of its assets during the hack. The exchange swiftly initiated arbitration proceedings through its affiliate, Nextgendev Solutions, to recover the frozen funds.
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WazirX’s Defense Dismissed
In court, WazirX argued that it bore no liability, citing a force majeure clause and ongoing restructuring processes in Singapore designed to socialize losses. However, the court rejected these defenses, noting “ambiguities and lack of clarity,” and reaffirmed that WazirX must comply with the tribunal’s orders.
“This ruling signals a maturing legal framework for cryptocurrency in India,” said a blockchain legal expert. “Exchanges must now ensure robust security measures and transparent custodial practices to protect investors’ assets.”
Implications for India’s Crypto Market
For crypto users, the decision highlights the importance of choosing exchanges with strong security protocols, verified custody solutions, and clear dispute resolution mechanisms.
While CoinSwitch continues its recovery efforts, the ruling establishes a significant legal precedent for handling crypto-related disputes in India. Experts suggest it could influence future cases involving exchange breaches, custodial liability, and investor protection, marking a critical step toward a safer and more accountable Indian cryptocurrency ecosystem.
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