In a significant setback for crypto traders using the WazirX exchange platform, the Singapore High Court has rejected the restructuring plan of Zettai, the parent company of WazirX. The decision deals a fresh blow to stakeholders already reeling from the $235 million cyber heist that occurred nearly a year ago. The court found serious lapses in Zettai’s disclosures and raised concerns about its intentions to comply with key regulatory requirements in both Singapore and India.
The rejection not only halts Zettai’s proposed roadmap to recover and restructure the business but also delays the distribution of assets to thousands of creditors, adding more uncertainty for affected crypto investors.
The Background: Cyber Heist and Restructuring
In mid-2024, a massive cyberattack drained $235 million in virtual digital assets from wallets connected to WazirX. The breach, one of the largest in India-linked crypto history, triggered a financial and reputational crisis for the platform. Zettai, the holding company behind WazirX, proposed a scheme of arrangement to the Singapore High Court to restructure debts, recover stolen assets, and resume operations.
The restructuring plan initially gained strong support. In April 2025, 93.1% of eligible voting creditors, representing 94.6% of the total claim value, approved the scheme. Out of 1,41,476 scheme creditors, 1,31,659 voted in favor—showing strong consensus among investors and stakeholders.
Court Rejects Plan Over Non-Disclosure of Zensui Corporation
Despite the overwhelming support from creditors, the Singapore High Court rejected the scheme, citing Zettai’s failure to disclose critical information during the proceedings. At the heart of the controversy lies the incorporation of a new subsidiary—Zensui Corporation—in Panama, on March 10, 2025.
Zettai concealed this development while presenting the restructuring proposal. The company also failed to inform the court and its users about an agreement to transfer cryptocurrency assets to Zensui, essentially placing large sums of digital wealth beyond immediate regulatory oversight.
This lack of transparency raised red flags within the legal system. The Singapore High Court could not approve a plan that lacked full disclosure and sidestepped accountability, especially when it involved the management and custody of crypto assets belonging to thousands of investors.
Regulatory Compliance Failures Deepen Legal Trouble
The court noted that Zettai had no intention of applying for a Digital Token Service Provider (DTSP) licence in Singapore. This license is mandatory under Singapore’s Financial Services and Markets Act 2022, which requires all digital asset companies operating from the country to comply with strict anti-money laundering and operational standards by June 30, 2025.
Furthermore, the company revealed that neither Zettai nor its Panamanian subsidiary Zensui planned to register with India’s Financial Intelligence Unit (FIU-IND). FIU registration remains a legal prerequisite for offering or redistributing virtual digital assets in India.
Legal expert Navodaya Singh Rajpurohit, founder of Pravadati Legal, explained the gravity of these omissions. He stated, “Zettai not only failed to disclose the Panama subsidiary’s existence and asset transfers, but it also clearly expressed that it would not seek regulatory registration in either jurisdiction. These omissions and regulatory non-compliances made the scheme unviable and lacking in transparency.”
Impact on WazirX Users and Creditors
The court’s dismissal severely disrupts WazirX’s efforts to regain user trust and operational stability. With the scheme rejected, Zettai loses its legal foundation to distribute recovered assets, further delaying reimbursements to the 1.4 lakh affected users.
Investors who voted overwhelmingly in favor of the scheme now face a longer and more uncertain wait to recover their funds. The platform must now revisit its legal strategy, possibly appeal the court’s decision, and design a revised plan that aligns with jurisdictional compliance requirements.
One insider close to the company shared that Zensui’s incorporation aimed to provide interim custody of the assets until Zettai could migrate to a more regulatory-friendly environment. However, that intention could not justify the non-disclosure of key information to courts and creditors.
Legal Justifications and Corporate Response
In court filings, Zettai argued that Singapore’s FSM Act does not legally obstruct the execution of the first asset distribution phase or the approval of the scheme. The company claimed that Zensui merely served as a temporary vehicle to safeguard digital assets until a longer-term jurisdictional framework came into effect after June 2025.
Despite these explanations, the Singapore High Court held firm. It emphasized that full disclosure and clear regulatory intent remain prerequisites for judicial approval. The omission of material information undermined the credibility of the proposal, regardless of the company’s justifications.
Following the court’s decision, WazirX issued a public statement on X (formerly Twitter), saying:
“The Honourable Singapore High Court issued an order declining to approve our proposed restructuring plan. While this outcome was not what we anticipated, we respect the Court’s decision and remain fully committed to complying with all legal and regulatory processes.”
Potential Appeal and Next Steps
According to sources familiar with the matter, Zettai may consider appealing the decision, though no official announcement has confirmed this direction. If Zettai files an appeal, it must first address the court’s primary concerns—transparency, regulatory alignment, and proper disclosure regarding Zensui and asset transfers.
To move forward, the company must either secure DTSP licensing in Singapore or shift its restructuring jurisdiction completely—possibly to Panama, where Zensui now operates. However, such a move may further complicate regulatory oversight, especially for Indian investors protected under India’s crypto asset compliance framework.
Lessons for the Indian Crypto Ecosystem
The episode highlights growing global pressure on crypto companies to comply with multi-jurisdictional regulations. Even though the industry operates in decentralized environments, legal accountability has become unavoidable—especially in countries like Singapore and India that now enforce stricter crypto compliance laws.
This case serves as a warning to other platforms that attempt to shift operations offshore without full disclosure. Transparency, legal integrity, and proper communication with users and regulators remain non-negotiable in today’s environment.
Final Thoughts
The Singapore High Court’s rejection of Zettai’s restructuring plan underscores a central truth: Crypto platforms cannot bypass regulatory frameworks with creative structuring or partial disclosures. The integrity of financial systems—especially those managing public funds—demands openness, accountability, and compliance.
Zettai’s missteps in handling sensitive corporate disclosures and regulatory intent have now cost it both credibility and legal standing. Thousands of WazirX users, still waiting to recover lost digital assets from the 2024 cyberattack, must now endure additional delays.
As global regulators tighten their grip on digital asset platforms, companies must learn from this case and align their strategies with both legal transparency and investor protection. Without that foundation, even the most well-supported schemes risk rejection in court—and in the marketplace.
