Supreme Court Registers Case Against WazirX Following $234 Million Hack

The Supreme Court of India has officially registered a criminal writ petition filed by more than 50 victims of the July 2024 WazirX cryptocurrency exchange hack, which resulted in estimated losses of over ₹2,000 crore (approximately $234 million).

The petition names WazirX’s management, including co-founder Nischal Shetty, Binance Holdings, and Liminal Custody as respondents. Victims allege gross negligence, mismanagement of user assets, and a lack of security protocols that led to one of India’s largest crypto hacks to date. The petition is being heard by a bench comprising Justice B.R. Gavai and Justice Augustine Masih, with the first hearing scheduled for April 16, 2025.

Consumer court declines jurisdiction

The victims initially took their complaints to the National Consumer Disputes Redressal Commission (NCDRC), which dismissed the case in February 2025. The Commission cited limitations in its ability to rule on cryptocurrency matters due to the lack of a clear legal framework in India. While cryptocurrencies are taxed and considered “goods” under the Consumer Protection Act, they are not recognized as legal tender, creating a regulatory grey zone.

Legal experts say the Supreme Court’s involvement could set a precedent in defining how Indian courts handle cases involving digital assets and consumer rights. The absence of a specific regulatory mechanism for crypto assets has left many investors vulnerable and with limited avenues for redress. The case, therefore, is being closely watched not only by affected users but also by policymakers and industry stakeholders.

The petition includes serious accusations beyond negligence. It alleges the hack may be linked to the North Korean state-backed Lazarus Group and claims WazirX attempted to obscure the scale of the breach. The victims also accuse the company of data manipulation, misuse of shell corporations, and failure to protect over ₹4,500 crore in customer funds. Approximately 4.4 million Indian users are believed to have been impacted by the incident.

According to the victims, WazirX’s operations exhibited signs of systemic mismanagement, including the lack of sufficient internal controls, opaque fund custody mechanisms, and inadequate response times following the breach. Some also claim the exchange tried to downplay the extent of user losses in initial communications, further eroding trust.

Following the breach, WazirX secured approval from the Singapore High Court to initiate a multi-pronged recovery plan. The plan includes the release of $284 million in liquid assets to reimburse affected users, the issuance of “recovery tokens” redeemable through future profits, and a platform relaunch with enhanced security architecture.

The recovery tokens, a novel concept in crisis management for crypto firms, will be bought back using profits generated in the first three years of the new platform’s operations. This model has drawn a mixed response from users, with some expressing cautious optimism, while others remain skeptical about the platform’s ability to restore confidence and profitability.

The company has also pledged to increase transparency and accountability through regular audits and enhanced communication with users. Several online town halls have been held to update the community on progress and next steps, and WazirX has stated its commitment to regaining public trust.

Implications for Indian crypto regulation

The case is expected to have far-reaching implications for how India approaches cryptocurrency regulation and consumer protection. With no formal crypto legislation yet in place, the Supreme Court’s ruling may influence future regulatory efforts and define jurisdictional boundaries for legal recourse in digital finance.

Analysts believe the case could catalyze the introduction of a clear legislative framework for digital assets in India. The outcome may also establish a judicial benchmark for liability and accountability in the event of crypto-related financial crimes. As India’s crypto user base continues to grow, the need for robust legal protections has never been more urgent.