Singapore High Court rejects WazirX’s restructuring plan for $234.9M hack, citing lack of transparency, as exchange shifts to Panama under Zensui.
The Singapore Court on Wednesday rejected the exchange management’s proposal for a restructuring scheme, citing a “lack of transparency” from its parent entity Zettai Pte Ltd, which represented the petition, almost a year after the WazirX exchange was hacked for $234.9 million (Rs 2000 crore) in cryptocurrencies.
The Singapore High Court’s most recent decision has resulted in WazirX, a cryptocurrency exchange that serves 4.4 million Indian users, being unable to survive in a country that it had chosen to relocate to to expedite the judicial process following the July 2024 breach. WazirX has now submitted a claim to the Singapore Court that they are relocating their headquarters to Panama under the new company name “Zensui.”
The petition filed by Zettai Pte Ltd, which sought approval for a restructuring scheme, was dismissed by judicial commissioner Kristy Tan, according to several petitioners who attended the online hearing live on Wednesday. WazirX had claimed that the creditors (users) would be compensated for 85% of their locked funds.
Although Tan’s directives were delivered orally in court, a comprehensive written order is anticipated to be published within the next three to four days.
In an interview with Coingape, Chartered Accountant Sonu Jain, who was one of the numerous petitioners against WazirX, stated, “The honorable Singapore Court had established June 4 as the date for the verdict in the WazirX restructuring petition as their moratorium deadline of June 6 was approaching.” Nevertheless, the Singapore government recently issued an order mandating companies that provide crypto services to foreign consumers to register themselves.
“In that regard, Judge Kristy Tan asked WazirX’s counsel whether they had applied for a license to operate Zettai in Singapore.” They responded by stating that they are not interested in obtaining a license and are planning to relocate to Panama, where they had already registered a company on March 10. The judge was displeased with WazirX’s decision to keep the court in the dark for months and only respond when prompted. Jain added that Judge Tan expressed her belief that the management is not interested in returning consumers’ money.
At the same time, on June 5, WazirX emailed its users, informing them that the company is rebranding as Zensui and altering its legal identity. The email contained redacted court documents.
The court’s verdict was met with gratification by numerous WazirX users, who primarily expressed their dissatisfaction with the exchange management’s handling of the hack crisis over the past decade. Several exchange users had approached the Supreme Court of India and high courts to demand an emergency intervention in restructuring, alleging that the management had made arbitrary decisions. Nevertheless, the courts disregarded the petitions, suggesting a dearth of regulatory framework for cryptocurrency in India.
“The Singapore Court’s decision to reject Zettai’s fraudulent application is not only a legal triumph but also a moral one.” This is a significant victory for all Indians who were deceived, manipulated, and robbed by these so-called crypto custodians. India must recognize that while foreign tribunals administer justice, our own regulatory vacuum facilitates fraud. The time to regulate cryptocurrencies in India is not tomorrow but today. “Justice must not be outsourced; it must be delivered domestically,” stated Romy Johnson, a victim of the WazirX hack and a proponent of crypto justice and regulations in India.
WazirX subsequently issued a comprehensive statement regarding the court verdict on Wednesday evening, asserting that their objective is to expedite the distribution of funds.
“Our proposed restructuring plan was denied approval by the Honourable Singapore High Court.” We are steadfast in our dedication to adhering to all legal and regulatory procedures, even though the outcome was not as we had hoped. We are respectful of the Court’s decision. We are committed to initiating distributions as soon as feasible. In an official statement, WazirX stated, “We are currently assessing all available legal options in consultation with our legal and advisory teams to achieve this objective. We will be appealing the Singapore High Court’s decision.”
