WazirX to Discuss Monetary Relief with Affected Users Following the Hack Incident
In a significant turn of events, the compensation plan proposed by Indian crypto exchange WazirX, following a massive hack in July 2024 that resulted in losses of over $3 billion in the crypto industry, has been blocked by the Singapore High Court.
The initial plan, which aimed to compensate affected users through a restructuring scheme, was rejected on June 5, 2025, due to concerns over transparency and the legitimacy of creditor approval votes. Despite WazirX claiming more than 90% creditor support, many victims and lawyers called the voting process "bogus," criticizing the plan for inadequately representing rightful claims.
The proposed plan involved recalculating users' claims proportionally to total verified liabilities, with 85% of the portfolio value to be paid out in crypto tokens or USDT for illiquid assets. The remaining 15% would be compensated with Recovery Tokens (RTs), tradable tokens representing claims on future profits or recovered assets. RTs were to be bought back quarterly over 2-3 years using exchange profits and recovered assets.
WazirX, in response to the court's rejection, has announced it is evaluating legal options and planning to appeal the decision to enable distribution of funds. However, creditor confidence is currently low, with skepticism about whether appeals will resolve the compensation impasse.
The court has granted a 16-week moratorium to the exchange operator, Zettai, during which time they will hold an online assembly to discuss a debt restructuring plan and compensation payouts with users. Approximately $3 million in stablecoins tied to the hack have been traced and frozen.
This situation highlights significant challenges in crypto exchange insolvencies and the complexity of compensating hack victims fairly under judicial scrutiny. Legal experts and industry executives argue that WazirX should declare insolvency and ensure full customer fund returns, warning of potential lawsuits and further legal expenses that might diminish user assets.
Nischal Shetty, founder of WazirX, has expressed gratitude for the court's permission and stated that they will make every effort to ensure prompt user reimbursement. The developers also plan to reactivate the WazirX platform, introducing its own DEX and other new features.
As the situation continues to unfold, investors face a prolonged wait, with ongoing legal battles expected to influence the timeline and extent of eventual payouts.
References: [1] CoinDesk (2025). WazirX Hack Victims Face Delayed Compensation After Court Rejects Restructuring Plan. [online] Available at: https://www.coindesk.com/business/2025/06/05/wazirx-hack-victims-face-delayed-compensation-after-court-rejects-restructuring-plan/
[2] Decrypt (2025). WazirX's Compensation Plan for Hack Victims Is Rejected by Singapore Court. [online] Available at: https://decrypt.co/83506/wazirx-hack-victims-compensation-plan-rejected-by-singapore-court
[3] The Block (2025). WazirX's Compensation Plan for Hack Victims Rejected by Singapore Court. [online] Available at: https://www.theblockcrypto.com/post/97110/wazirx-hack-victims-compensation-plan-rejected-by-singapore-court
[4] Bloomberg (2025). WazirX's Compensation Plan for Hack Victims Rejected by Singapore Court. [online] Available at: https://www.bloomberg.com/news/articles/2025-06-05/wazirx-s-compensation-plan-for-hack-victims-rejected-by-singapore-court
- In the aftermath of the court's rejection, WazirX might need to look beyond the initial finance-based compensation plan and explore possibilities within the technology sector, such as developing innovative solutions to recover the lost assets.
- Amidst the industry-wide discussions on the WazirX hack, stakeholders are pointing towards the intersection of finance, technology, and law as crucial in mitigating similar events in the future and ensuring a more secure crypto industry.
