WazirX, the embattled Indian crypto exchange, has encountered a major legal hurdle as the Singapore High Court declined to approve its proposed restructuring plan. This decision has again delayed repayments to creditors and could push the company closer to potential liquidation.
Restructuring Plan Denied, Payout Timeline Uncertain
Initially approved in January, WazirX’s restructuring plan promised to begin creditor payouts as early as April 2025. However, with the court’s recent rejection, that timeline has shifted into indefinite territory.
“The Honourable Singapore High Court issued an order declining to approve our proposed restructuring plan,” WazirX wrote in a communication to creditors. The company expressed disappointment but pledged to comply with all legal and regulatory obligations.
What Was in the Restructuring Plan?
The plan included:
- Launching a decentralized exchange (DEX) to restore operations.
- Issuing recovery tokens to represent creditor claims.
- Implementing buyback programs to stabilize token liquidity.
- Distributing funds within 10 business days of the plan’s activation.
The goal was to avoid liquidation and provide a higher recovery rate for affected users. However, with the court’s disapproval, these initiatives are now on hold.
Origin of WazirX’s Crisis
WazirX filed for protection after suffering a $230 million hack, allegedly carried out by North Korea’s Lazarus Group. Since then, the exchange has faced backlash over its slow recovery efforts, minimal transparency, and restricted user access to information, especially on social media platforms.
The failure to gain court approval now places WazirX at risk of liquidation under Section 301 of the Singapore Companies Act. If enacted, this could lead to fire-sale asset pricing and significantly lower compensation for creditors.
Outlook for Creditors and Users
The rejection marks another setback in WazirX’s ongoing battle for survival. Creditors — many of whom had accepted the initial plan — are now left uncertain, with no clear repayment schedule and no immediate alternative proposal from the exchange.
If restructuring fails, liquidation may become unavoidable — and creditors stand to lose more.
The Singapore High Court’s rejection of WazirX’s restructuring plan deepens the uncertainty for creditors, with liquidation now a real possibility if a revised solution isn’t found.
