A group of WazirX investors has encountered a major setback in their pursuit of justice after the National Consumer Disputes Redressal Commission (NCDRC) refused to hear their case regarding the $234 million crypto hack. The primary reason? India’s lack of a clear regulatory framework for cryptocurrencies.
With no legal provisions governing digital assets, the commission stated that it could not intervene, leaving investors in a legal limbo. However, the fight is far from over, as the investors plan to escalate their case to the Supreme Court. Meanwhile, WazirX is implementing a compensation plan to help affected users recover their losses.
Investors Push for Supreme Court Intervention
Despite the NCDRC’s dismissal, investors’ legal representative Aman Rehaan Khan has announced plans to approach the Supreme Court, seeking not only financial recovery but also criminal proceedings against those responsible for the hack.
Although the decision was disappointing, Khan noted a key legal development—cryptocurrencies were recognized as “goods” under the Consumer Protection Act and as taxable assets under the Income Tax Act. The case, initially filed by 40 investors, involves claims totaling INR 12 crore (approximately $1.4 million).
India’s Crypto Regulation Dilemma
India’s stance on cryptocurrency remains ambiguous. While crypto is not considered legal tender, the government imposes a 30% tax on digital asset profits. Additionally, exchanges must register with the Financial Intelligence Unit (FIU) under the Finance Ministry.
However, regulatory clarity remains elusive. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was planned but never introduced, leaving the industry vulnerable to fraud without proper legal protections. The Supreme Court’s ruling on the WazirX case could set a precedent for future crypto regulations in India.
WazirX’s Compensation Plan
WazirX, under CEO Nischal Shetty, is working on a restructuring initiative aimed at compensating affected investors. The company has committed to reimbursing 85% of stolen assets through a court-approved plan in Singapore.
The plan involves releasing $284 million in liquid assets and distributing recovery tokens to investors. Once financial liabilities are balanced, these tokens will be allocated to creditors. Additionally, WazirX plans to relaunch its platform with a decentralized exchange featuring enhanced security. Profits from the first three years post-relaunch will be used to repurchase recovery tokens, providing further relief to investors.
With the Supreme Court case on the horizon and WazirX moving forward with its compensation strategy, the coming months will be crucial for India’s crypto landscape. The verdict could significantly influence the future of digital asset regulations in the country.
Also Read: WazirX Warns Repayments from $234M Hack Could Be Delayed Until 2030, With Two Possible Outcomes
For WazirX investors, the pressing question remains—will they ever recover their lost funds?
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
