The Singapore High Court has denied the moratorium application filed by Zettai Pte Ltd, parent company of crypto exchange WazirX, effectively halting its proposed restructuring plan aimed at compensating users affected by last year’s $234 million hack.
The plan, which had secured over 93% creditor approval, included redistributing recovered assets and resuming trading within ten business days of court authorisation.
WazirX had previously secured a four-month conditional moratorium from the court in September 2024.
However, the recent ruling marks a significant setback for the India-facing, Singapore-registered exchange, which is now shifting its operations to Panama and rebranding its parent company as Zensui.
In an email to users, WazirX shared redacted legal documents detailing the transition.
The document said:
“Zettai has taken steps to incorporate a subsidiary, Zensui Corporation […] in the Republic of Panama, and has been preparing for the transfer of the operations of the Platform’s cryptocurrency-related services to Zensui.”
The move comes amidst tightening crypto regulations in Singapore.
The Monetary Authority of Singapore (MAS) has mandated that local digital token service providers cease offering services to overseas markets by 30 June.
Despite the court's rejection, WazirX maintains that its Net Liquid Platform Assets (NLPA) remain intact and stabilised post-breach.
The exchange reaffirmed its commitment to meeting legal obligations and is considering alternative legal remedies, including a potential appeal.
During the virtual hearing, Judicial Commissioner Kristy Tan orally dismissed the restructuring request, which had proposed reimbursing users for 85% of their frozen assets.
A formal written judgment is expected within a few days.
Legal consultant Jalaj Jain, formerly a practicing lawyer, noted that the ruling may also carry implications for WazirX’s India-based operations, adding further complexity to the platform’s evolving legal landscape.
He added:
“However, it would be premature to draw definitive conclusions in the absence of clear guidance from Indian regulators or directly affected stakeholders.”
Crypto analyst Sonu Jain, representing petitioners on behalf of WazirX users, emphasized that the court’s rejection of the exchange’s moratorium application underscored significant transparency issues.
Notably, Zettai failed to inform both the court and its users about its relocation to Panama and rebranding as Zensui.
Adding to the uncertainty, the MAS issued a directive on 30 May requiring all unlicensed crypto exchanges operating in the country to cease services by 30 June.
With Zettai no longer registered in either Singapore or India, its ability to execute the restructuring plan faces substantial legal hurdles.
Furthermore, ongoing ownership disputes between Zettai and Binance over WazirX complicate the platform’s future, raising critical questions about governance and accountability.
WazirX had previously obtained a four-month conditional moratorium from the Singapore High Court, temporarily shielding the exchange from legal action across multiple jurisdictions.
This moratorium is set to expire on 6 June.
With the court’s recent rejection of WazirX’s application, Indian users are now free to pursue litigation locally to recover their locked funds following last year’s hack.
However, according to Jain, users should brace for a potentially lengthy legal battle, with fund recovery possibly taking several years.
In a recent court disclosure, Zettai revealed that it established a new entity, Zensui, in Panama on 10 March, marking a strategic rebrand and operational shift to the Central American nation.
The company confirmed that the transfer of Zettai’s operations to Zensui is finalised and ready for execution, with cryptocurrency services expected to transition within two to three business days once implemented.
Zensui will also oversee the issuance of WazirX recovery tokens, central to the exchange’s post-hack compensation plan.
Notably, the company has no plans to seek licensing to operate in Singapore or register with India’s Financial Intelligence Unit, despite continuing to serve Indian customers.
Jain suggests this decision aligns with Singapore’s stricter regulations banning unlicensed firms from offering crypto services abroad, implying WazirX opted for relocation over compliance.
During proceedings, Judge Kristy Tan pressed WazirX’s counsel on whether Zettai had pursued a Singapore license, to which counsel admitted there was no intention to obtain one, confirming the Panama registration instead.
The judge criticised the management for withholding this crucial information until explicitly questioned, expressing scepticism about their commitment to returning users’ funds.
The ruling was met with approval from many WazirX users, who have long criticised the exchange’s handling of the hack and its aftermath.
Despite numerous petitions to India’s high courts and Supreme Court for urgent restructuring, these were dismissed due to the absence of a regulatory framework for crypto in India.
However, the move has sparked controversy within the crypto community.
Influencer RK Gupta accused WazirX of leveraging the rebrand to evade regulatory oversight, raising fresh concerns about accountability in this evolving saga.
Romy Johnson, a WazirX hack victim and advocate for crypto justice and regulation in India, describes the Singapore High Court’s recent ruling as both a legal victory and a moral reckoning.
She calls it a monumental triumph for every Indian defrauded by so-called crypto custodians.
Johnson emphasizes that while courts abroad deliver justice, India remains trapped in a regulatory void that enables fraud to flourish.
According to her, the urgent test for cryptocurrency regulation in India is not a distant challenge but an immediate necessity—justice must be administered domestically, not outsourced.
In response to the court’s verdict, WazirX issued a statement Wednesday evening reaffirming its commitment to swiftly begin distributing user funds.
While respecting the court’s decision, the exchange expressed surprise at the denial of its restructuring plan.
WazirX pledged to fulfill all legal and regulatory obligations and prioritise returning funds to users.
The company also disclosed it is consulting legal experts to explore options for appealing the ruling and intends to challenge the decision further.
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