WazirX: From India’s Crypto Star to Investor Nightmare
Founded in 2018 by Nischal Shetty, Sameer Mhatre, and Siddharth Menon, WazirX became a beacon of India’s crypto boom. Shetty’s #IndiaWantsCrypto campaign pushed for regulation, and by 2021, WazirX was handling billions in trades with millions of users. Its meteoric rise drew Binance’s interest, though a murky 2019 “acquisition” left ownership disputes unresolved.
Then came the hack. WazirX’s fall from grace wasn’t just a financial blow — it shattered trust in India’s crypto ecosystem.
A Crypto Catastrophe Leaves Investors Stranded
Overnight, lakhs of investors lost access to their funds — some their entire life savings. On social media platforms, victims to the hack share stories of financial ruin, pleading for help. Yet, Indian courts have shut the door, and regulators remain mute. They have no other option but to sit with their heads in their hands. A Singapore court hearing in May 2025 will decide WazirX’s fate, but for victims, justice feels like a mirage.
So, what happened? And why is India’s response so deafeningly quiet?
The Hack That Rocked India’s Crypto Dream
On 18 July 2024, hackers breached WazirX, siphoning off $230 million in crypto assets. Trading and withdrawals were frozen, locking out hundreds of thousands of users. Blockchain security firms, including global experts, pinned the attack on North Korea’s Lazarus Group — a notorious state-backed hacking syndicate linked to heists like the Ronin Bridge ($600M) and Atomic Wallet.
Stolen funds were traced to crypto mixers and addresses tied to Lazarus, confirming the group’s signature laundering tactics. Despite the international stakes, Indian authorities haven’t uttered a word about this foreign assault on a homegrown platform.
The Restructuring Plan: Hope or False Promise?
The company’s parent firm Zettai, based in Singapore, filed a restructuring application under Singaporean corporate law. The proposed scheme outlines a two-path scenario:
If approved, trading was set to restart in April 2025. Creditors would receive 52% of their approved claims within 10 business days, followed by further repayments tied to platform profits and asset recoveries.
If rejected, the company would likely face liquidation—a process forecasted to drag on until 2030, with little hope of meaningful recovery.
As of now, 93.1% of voting creditors, representing 94.6% of the total claim value, have supported the plan. But its implementation hinges on the May 2025 hearing at the Singapore High Court.
Why is the Hearing in Singapore, Not India?
WazirX is owned by Zettai, incorporated in Singapore. All legal agreements—including those signed by Indian users—contain clauses mandating that legal disputes fall under Singaporean law and jurisdiction.
This is why the Singapore High Court granted a four-month moratorium in September 2024 and is now the venue for the final decision on the restructuring.
Victims Turn to Courts in India, Only to Be Shown the Door
Victims turned to the legal system for recourse:
A class-action suit by 40 investors was dismissed by the National Consumer Disputes Redressal Commission (NCDRC). The commission held that since crypto isn’t legal tender in India, the complaint didn’t stand under consumer protection laws.
The Supreme Court of India also rejected a petition by 54 WazirX users that sought to investigate co-founder Nischal Shetty, Binance, and custody provider Liminal. The court said the issue was a policy matter, not a judicial one, citing the lack of regulatory clarity in India.
Delhi Police Probe Stalls Amid Diplomatic Tensions
On 18 October 2024, the Delhi High Court issued notices to Delhi Police, the Enforcement Directorate, and the Financial Intelligence Unit, querying a potential WazirX probe. Delhi Police’s Special Cell arrested SK Masud Alam from West Bengal for selling WazirX account credentials to “Hasan,” a Bangladesh-based suspect linked to the 18 July hack. Masud used KYC details of an unaware laborer, Souvik Mondal, to create the account, which Hasan bought via Telegram.
The investigation, led by Delhi Police’s IFSO unit, has stalled since Bangladesh’s August 2024 coup. Strained India-Bangladesh relations have barred Indian officers from pursuing Hasan, who may have gone underground. A supplementary charge sheet was expected by February 2025, but diplomatic hurdles seem to have halted progress.
India’s Crypto Paradox: Taxed but Unprotected
India does not officially recognize or regulate cryptocurrencies. While trading is not illegal, there is no investor protection framework or governing authority.
The government has imposed a 30% tax on crypto profits and a 1% TDS, indicating de facto recognition without formal legitimacy. Yet the Reserve Bank of India (RBI) continues to caution against crypto risks, and the much-anticipated Crypto Bill remains missing in action.
To date, no Indian regulatory body has commented on the WazirX hack or the involvement of a foreign adversary like North Korea. Over 1.4 lakh Indian investors are left to fend for themselves.
Global Contrast: Action vs. Inaction
Globally, responses to crypto scams have been swift and decisive:
In the FTX collapse, U.S. regulators charged Sam Bankman-Fried, who has since been convicted and sentenced.
South Korea issued arrest warrants and collaborated with Interpol to hunt Do Kwon following the Terra-Luna crash.
Japan and the U.S. have both issued sanctions and warnings targeting the Lazarus Group and associated wallets.
India, however, has taken no such steps — even in a case where its citizens are the primary victims of an attack allegedly perpetrated by North Korea.
The Burning Question: Why Is India Silent?
With several lakh Indian investors affected, and foreign hackers allegedly involved, India’s silence is striking. The victims are left chasing justice, with no regulatory support.
Shouldn’t Indian agencies at least investigate the case with some sincerity? And if India is collecting taxes on crypto, shouldn’t it also offer investor protection and legal recourse?
What Do You Think? Is this justice denied? Or is India simply not ready for crypto accountability?
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