Crucial May Hearing Offers Hopeful Restart for WazirX Crypto Exchange & User Compensation

The Indian cryptocurrency community is holding its breath as WazirX, a prominent crypto exchange, approaches a pivotal moment in its journey to recovery. After a significant security breach last year, WazirX is on the cusp of potentially restarting operations and delivering much-anticipated compensation to its users. The exchange has confirmed that a crucial hearing in May is on the horizon, and the outcome could pave the way for a hopeful resurgence. Let’s dive into the details of this eagerly awaited development.

WazirX Crypto Exchange: Awaiting the Green Light for Restart

WazirX, a leading crypto exchange in India, is navigating the final stages of its recovery plan following a substantial $234 million hack in July 2024. The exchange has pinpointed a mid-May court hearing as the key event that could unlock its operational restart. This hearing is set to decide on the restructuring proposal and, importantly, the plan for user compensation.

According to WazirX’s recent update on X (formerly Twitter), the Singapore High Court is scheduled to convene on May 13, 2025, for a sanction hearing. A positive decision from the court would empower WazirX’s parent company, Zettai PTE Ltd, to reactivate the exchange. Furthermore, it would trigger the implementation of the user compensation scheme within ten business days. This timeline offers a beacon of hope for users who have been patiently waiting since the platform was forced to pause withdrawals due to the cyberattack.

Here’s a quick breakdown of the key events:

• July 2024: WazirX suffers a $234 million hack attributed to North Korean hackers, leading to paused withdrawals.
• January 2025: Singapore High Court permits Zettai to propose a remedy and restart plan.
• April 7, 2025: Over 90% of creditors approve WazirX’s restructuring plan involving recovery tokens.
• April 21, 2025: WazirX confirms May 13, 2025, as the date for the sanction hearing in Singapore.
• May 13, 2025 (Scheduled): Singapore High Court hearing to decide on the restart and compensation plan.

The Road to Restart: What’s Next for WazirX?

WazirX has emphasized that “Zettai has completed all prior required steps,” underscoring their preparedness for this critical juncture. The upcoming sanction hearing is the “essential” step to legally validate their restructuring scheme. While WazirX acknowledges its efforts to align with previous timelines, they also recognize the independent nature of court proceedings and are respectful of the judicial process.

The restructuring plan, which received overwhelming creditor approval, centers around the issuance of recovery tokens. These tokens are designed to be repurchased using the exchange’s net profits. WazirX projects that this mechanism could potentially return 75% to 80% of users’ account balances that were affected by the cyberattack. The exchange had previously cautioned that without creditor approval, repayments from the $235 million hack could face significant delays, possibly stretching until 2030. The positive creditor vote was a significant step in averting this lengthy delay and moving towards a faster resolution for affected users.

User Compensation and Recovery Tokens: A Ray of Hope

The proposed user compensation plan hinges on the success of the recovery tokens. Here’s how it’s intended to work:

• Recovery Token Issuance: WazirX will issue recovery tokens to users affected by the hack.
• Profit-Based Repurchase: Net profits generated by the crypto exchange will be used to repurchase these tokens.
• Potential Recovery: Users could potentially recover 75% to 80% of their account balances at the time of the hack.
• Faster Repayment: This plan aims to expedite repayments compared to a scenario without restructuring approval.

WazirX has reiterated its understanding of user eagerness for the platform restart and expressed gratitude for their continued patience. They have consistently communicated the April-May 2025 window for the initial distribution and platform reactivation, and they remain focused on achieving this timeline, pending the court’s decision.

Supreme Court of India Dismisses User Petition: Focusing on Regulatory Avenues

In related legal developments, the Supreme Court of India recently dismissed a petition filed by 54 WazirX users who were victims of the hack. These petitioners had sought legal action against WazirX, its founder Nischal Shetty, Binance, and custody provider Liminal. They also requested an audit of WazirX’s financial accounts.

Justices B.R. Gavai and Augustine Masih declined to rule on the petition, citing that the matter fell under crypto policy, an area outside the court’s jurisdiction. Instead, they advised the petitioners to seek recourse through a regulatory body or other relevant authority empowered to address such issues. This separate legal development underscores the complex regulatory landscape surrounding cryptocurrencies in India and the limitations of judicial intervention in policy matters.

Looking Ahead: The Imminent May Hearing and WazirX’s Future

As the date for the crucial May 13th hearing approaches, all eyes are on the Singapore High Court. The outcome of this hearing will be decisive for WazirX’s immediate future and the prospects of user compensation. A favorable ruling would not only pave the way for the crypto exchange’s restart but also offer a significant measure of relief and recovery for its affected user base.

The crypto community in India and beyond will be keenly following the developments, as WazirX’s case sets a precedent for how exchanges handle significant security breaches and user compensation in the evolving digital asset landscape. The restart of WazirX would be a welcome sign of resilience and recovery in the face of adversity within the cryptocurrency sector.

Stay tuned for further updates as the crypto world awaits the outcome of this vital hearing and the potential restart of WazirX.