WazirX Hack Update: Supreme Court to Review $234M Crypto Fraud Case

A group of WazirX investors has hit a roadblock in their fight for justice after the National Consumer Disputes Redressal Commission (NCDRC) refused to hear their case over the $234 million crypto hack.

The reason? India’s lack of clear regulations on cryptocurrency. With no legal framework in place, the commission says it cannot investigate the matter – leaving investors stranded. But this battle is far from over. With plans to take the case to the Supreme Court and WazirX working on a recovery plan, the coming months could change the future of crypto in India.

Investors Take Their Fight to the Supreme Court

Despite this setback, the investors’ lawyer, Aman Rehaan Khan, has announced plans to approach the Supreme Court. He intends to seek the recovery of lost funds and criminal action against those responsible for the hack.

While the NCDRC’s decision was disappointing, Khan pointed out that there was some progress. The consumer forum acknowledged that cryptocurrencies qualify as “goods” under the Consumer Protection Act and are also treated as property under the Income Tax Act. The case was initially filed by 40 investors who claim to have lost around INR 12 crore (approximately $1.4 million).

The Legal Grey Area Around Crypto in India

Although cryptocurrencies are not legal tender in India, the government still imposes a 30% tax on crypto profits. Crypto exchanges operating in the country must also register with the Financial Intelligence Unit (FIU) under the Finance Ministry.

However, regulation remains unclear. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was planned but never introduced, leaving the crypto industry without clear legal protections. The Supreme Court’s decision is now highly anticipated, as it had previously lifted the RBI’s 2018 ban on crypto trading and criticized the government for failing to establish proper rules for crypto transactions and fraud investigations.

WazirX Plans to Compensate Investors

Meanwhile, WazirX, led by CEO Nischal Shetty, is moving ahead with a restructuring plan to help investors recover some of their lost funds.

The company has committed to returning 85% of the stolen assets through a restructuring initiative approved by a Singapore court. It has already held eight online town halls with affected customers, though further details are still awaited.

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The plan involves releasing $284 million in liquid assets and distributing recovery tokens to investors. Once the company balances its financial liabilities, these tokens will be given to creditors. WazirX also plans to relaunch its platform with a new decentralized exchange that will include improved security features. Profits from the first three years after relaunch will be used to buy back recovery tokens, offering further relief to affected investors.

The restructuring plan has already been approved by the Singapore court, and WazirX has completed the rebalancing process. Users will be able to start claiming their stolen crypto by April.

What Happens Next?

With WazirX working on compensation and the Supreme Court set to hear the case, the coming months will be crucial for crypto investors in India. The outcome could have a major impact on the future of crypto regulation in the country.

The crypto world in India remains a high-stakes game of risk and reward, but for WazirX investors, the real question is – will they finally see their lost funds again?

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