Singapore Court’s WazirX Ruling Sets Legal Precedent for Token-Based Crypto Recoveries

In a defining moment for crypto regulation and investor protection in Asia, the Singapore High Court approved WazirX ‘s restructuring plan. The court’s judgment legitimizes digital-token settlements within a traditional legal framework and clears the exchange to restart operations. They can now repay users affected by the $230 million hack that shook India’s largest crypto platform in 2024. The ruling paves the way for one of the first legally recognized token-based recoveries in global crypto history.

From Hack to Courtroom: A Year of Legal Turmoil

WazirX’s troubles began in July 2024. The hackers drained around $230 million from user wallets after breaching its hot-wallet system. The incident left over 150,000 active users unable to access their funds. As a result, the company sought protection under Singapore’s insolvency regime.

In June 2025, the same court rejected the exchange’s first crypto restructuring scheme, submitted in early 2025. The Singapore High Court cited transparency gaps related to a Panama-based entity and the unclear legal status of recovery tokens. Following months of revision, creditors approved a new plan in August with overwhelming support. 95.7% by number and 94.6% by claim value, representing more than $207 million in verified claims from about 149,000 creditors out of an estimated 4.3 million total users.

Inside the Approved Scheme

Under the restructuring plan sanctioned by the Singapore High Court, WazirX will begin a phased process to restore user access and settle verified claims once the scheme becomes legally effective. Several media reports indicate that the approved arrangement could follow the version supported by creditors in August. That proposal outlined the issuance of recovery tokens corresponding to verified user balances. These tokens may later be redeemed or traded under a framework similar to what was made public earlier.

According to outlets including Business Standard and Moneycontrol, the High Court’s ruling allows the crypto exchange to restart operations within ten business days of filing the court order with the Accounting and Corporate Regulatory Authority (ACRA). Administrators led by Kroll will oversee verification and repayment scheduling. Some reports suggest, however, that the first repayments could take up to 2–3 months to complete. The approved crypto restructuring scheme also confirms that BitGo will assume digital asset custody for the relaunched platform. The move is intended to enhance transparency and bolster asset security after the 2024 breach.

A Legal Milestone for Crypto Insolvency

The WazirX Singapore court approval does more than enable repayments: it sets a precedent. By validating token-based repayments within a statutory restructuring framework, the High Court has given judicial recognition to blockchain instruments as enforceable means of debt recovery.

Legal analysts see this as a milestone in crypto insolvency law, demonstrating how digital assets can be harmonized with existing corporate restructuring statutes. The case mirrors traditional debt-for-equity swaps, but with blockchain tokens replacing conventional securities.

In contrast, US Chapter 11 crypto cases like Celsius and FTX have struggled to classify or distribute crypto-denominated liabilities under bankruptcy codes. Singapore’s decision illustrates how a court-approved crypto restructuring can progress within clearer legal boundaries. It’s bridging the gap between finance law and blockchain technology.

Regulatory and Industry Impact Across Asia

Beyond the courtroom, WazirX’s legal turnaround has implications for cross-border crypto regulation in Asia. Singapore’s willingness to handle complex digital-asset insolvencies under established law bolsters its position as a regulated crypto hub balancing compliance with innovation.

The judgment could become a template for future crypto recovery precedents in the region. That’s especially relevant for Indian exchanges operating through offshore entities. It also reinforces Singapore’s reputation as a jurisdiction that fosters crypto restructuring precedents grounded in investor protection, not regulatory leniency.

For WazirX, the case’s success may help rebuild credibility in India’s cautious crypto market. Hopefully, it will inspire similar legal strategies in jurisdictions where crypto insolvencies lack clear frameworks.

>>> Read more: WazirX Becomes Zensui Amid Ongoing Trading Freeze

What Happens Next

The scheme will become effective once filed with ACRA, after which WazirX can officially relaunch trading and withdrawals. According to company statements, operations should resume within ten business days. A phased repayment for WazirX users via the recovery-token model will follow.

If WazirX executes the restructuring plan as outlined, the Singapore court approval could turn a hard-won legal ruling into a working model for token-based recoveries. One that demonstrates how digital-asset insolvencies can be resolved within established financial law rather than outside it.