WazirX passes a debt restructuring plan to recover user funds after the 2024 cyberattack - IcoHolder.

WazirX has taken a significant step toward recovering user funds lost in a 2024 cyberattack by passing a debt restructuring plan on April 7, 2025. The Scheme of Arrangement, filed by its parent company Zettai Pte Ltd with the Singapore High Court, received overwhelming support from creditors, with 93.1% voting in favor, representing 94.6% of the total value. Over 1.4 lakh creditors participated in the vote, and 1.3 lakh of them approved the plan. The next phase involves seeking court approval in Singapore, after which fund distribution will begin within 10 business days, and WazirX plans to restart trading and withdrawals gradually.

“We are grateful for the strong vote of confidence,” said Nischal Shetty, Founder of WazirX. “This consistent support across our entire base demonstrates shared belief in our restructuring approach and recovery plan.”

However, the restructuring process is facing scrutiny in India. The Delhi High Court has intervened in response to a petition filed by users who claim that WazirX is restructuring user crypto assets without their consent. The petitioners, Sudhir Verma and Kunal Dhariwal, argue that changes are being made to assets not impacted by the 2024 cyberattack, raising concerns over the rights and data protection of Indian users. The case, which was filed in October 2024, has prompted the court to issue a notice, giving the Indian government two weeks to respond.

The petition specifically challenges the Scheme of Arrangement proposed by Zettai on March 12, 2025, which involves redistributing and liquidating crypto assets worth ₹4,400 crore to cover Zettai's debts and operational costs, including ₹259 crore in legal and administrative fees. The petitioners argue that assets unaffected by the cyberattack, valued at ₹2,700 crore, are also being restructured without the consent of users, violating their rights.

Furthermore, the petition highlights concerns over forced legal waivers, which require users to drop legal cases against the platform, and raises issues regarding biased voting, as the process is being managed by a private advisor. The petitioners also express alarm about the potential breach of data privacy, as over 4 lakh Indian users' personal and financial information is reportedly being shared with foreign companies.

A key aspect of the case revolves around the petitioners’ claim that by taking the restructuring case to the Singapore High Court, WazirX is attempting to avoid Indian legal scrutiny, which could deprive Indian users of a fair legal resolution. The petitioners have called for a Special Investigation Team (SIT) to probe the cyberattack and ensure that Indian laws are properly enforced. The next hearing in the case is scheduled for April 29, 2025, marking another crucial moment in the ongoing legal battle over WazirX’s restructuring efforts.