Cryptocurrency platform WazirX confronts a legal dispute following allegations from users claiming unauthorized freezing of digital and traditional currency balances.
The legal dispute between WazirX users and the exchange's Singapore entity, Zettai, has been making headlines, with millions of dollars in digital assets and fiat balances at the heart of the controversy. WazirX users have taken their grievances to the Singapore High Court, challenging the freezing of their assets without justification and disputing the exchange's claim that these were affected by a hack [1][2][3].
At the centre of the dispute are allegations of misclassification and an alleged inside job. Users argue that Zettai grouped all assets—unhacked coins, fiat-like Indian rupees (INR), and allegedly hacked Ethereum/ERC-20 tokens—together for a corporate restructuring plan. However, they assert this is illegal under Singapore law as user-owned assets held in trust cannot be restructured like corporate debts [1][3].
Furthermore, users contest Zettai’s narrative of an external hack, presenting on-chain evidence suggesting the token movements to frozen wallets were internal transfers using multisignature wallets controlled by Zettai—not a hack by external actors [2][3].
Romy Johnson, a user advocate, has filed a detailed affidavit demanding full audits, disclosures about approvals for the asset movements, and accountability for suspicious crypto transfers. This affidavit may prove pivotal in the case [1][3][4].
The Singapore High Court has already rejected one of Zettai's restructuring proposals for hiding links to an offshore shell company [3]. The next hearing is scheduled for July 15, 2025, with a final hearing set for July 17, 2025. The outcome of these hearings could determine not only the fate of WazirX users' funds but also set important precedents on how crypto custodians globally treat user assets during crises [1][3][4].
The WazirX case has sparked concerns within the crypto community, with some questioning the operational transparency and user fund protection of the exchange, given its past security breaches [5]. Critics argue that this approach unfairly divides users, leaving nearly 45% with compromised wallets facing possible delays of up to a year [6].
Some within the crypto community have expressed support for WazirX, while others have voiced concerns. The ongoing legal battle has left many questioning whether trust in the exchange can be restored [1]. As the case progresses, the future of WazirX users' assets hangs in the balance.
References: [1] https://www.theblockcrypto.com/linked/110262/wazirx-users-take-their-frozen-crypto-to-singapore-high-court [2] https://www.coindesk.com/wazirx-users-allege-inside-job-in-crypto-exchanges-asset-freeze [3] https://www.bloombergquint.com/onweb/crypto-firm-wazirx-s-local-entity-zettai-faces-legal-scrutiny-in-singapore [4] https://www.coindesk.com/wazirx-users-file-affidavit-against-exchange-in-singapore-court [5] https://www.coindesk.com/wazirx-users-allege-inside-job-in-crypto-exchanges-asset-freeze [6] https://www.forkast.news/wazirx-users-fight-for-their-frozen-crypto-funds-in-singapore-court/
- The heart of the dispute between WazirX users and Zettai involves allegations of misclassification and an alleged inside job, with users asserting that the exchange unfairly grouped crypto assets, fiat-like Indian rupees (INR), and Ethereum/ERC-20 tokens together for a corporate restructuring plan.
- Romy Johnson, a user advocate, has filed a detailed affidavit demanding full audits, disclosures about approvals for the asset movements, and accountability for suspicious crypto transfers, which could prove crucial in the case.
- The Singapore High Court has already rejected one of Zettai's restructuring proposals for hiding links to an offshore shell company, and the next hearing is scheduled for July 15, 2025, with a final hearing set for July 17, 2025.
- The WazirX case has raised concerns within the crypto community about the operational transparency and user fund protection of the exchange, given its past security breaches, with some questioning whether trust in the exchange can be restored.
- The outcome of these hearings could set important precedents on how crypto custodians globally treat user assets during crises and determine not only the fate of WazirX users' funds but also the future of similar business models in the finance and technology industry.
- The ongoing legal battle has left many in the crypto community divided, with some supporting WazirX and others voicing concerns, as the future of WazirX users' assets hangs in the balance.
