What is the WazirX Restructuring Scheme? A Simple Explainer

In July 2024, WazirX, once India’s largest cryptocurrency exchange, suffered a devastating $235 million cyberattack attributed to North Korea’s Lazarus Group, wiping out approximately 45% of user funds. The breach triggered a crisis, halting trading and withdrawals, and prompting WazirX to propose a Scheme of Arrangement under Singapore’s High Court to address creditor claims.

After months of legal proceedings, revisions, and creditor voting, the Singapore High Court sanctioned the restructuring plan on October 13, 2025. The scheme, which secured overwhelming support from 95.7% of creditors by number and 94.6% by value, has now taken effect.

This explainer critically assesses the scheme’s mechanics, implementation status, and the first- and second-order consequences for users.

The WazirX Restructuring Scheme: Core Components

The Scheme of Arrangement, filed by WazirX’s parent company, Zettai Pte Ltd, aims to avoid liquidation and repay creditors (primarily users) under court supervision. Its key elements are:

Liquid Asset Distribution: WazirX has initiated distributions of liquid assets representing approximately 75-85% of creditor claims. Following the court’s approval on October 13 and the ACRA filing on October 15, 2025, distributions began within 10 business days as promised. Users are receiving their funds in cryptocurrency, allowing them to benefit from market movements rather than being locked into fiat valuations.

Recovery Tokens (RTs): The remaining 15-25% of claims are being addressed through RTs, which represent claims on WazirX’s future revenue streams, recovered illiquid assets, and stolen fund recoveries. These tokens can potentially be traded on secondary markets subject to regulatory approval, with WazirX planning to repurchase them using future platform profits over the next 36 months.

Platform Relaunch: WazirX is set to restart operations on October 24, 2025. The relaunch begins with select crypto-to-crypto pairs and the USDT/INR pair, with gradual expansion of additional markets planned.

Assessing Plausibility: Can WazirX Deliver?

Unlike the uncertain projections in earlier reports, we now have concrete outcomes to evaluate:

Liquid Asset Distribution (Successfully Implemented): WazirX delivered on its promise of distributing 75-85% of funds within 10 business days of the scheme’s effectiveness. Token swaps, mergers, delistings, and migrations were completed by mid-October 2025, enabling the exchange to process distributions smoothly. The platform restarted on October 24, 2025, as scheduled. This represents a successful execution of the primary component of the restructuring plan.​

Recovery Token Framework (In Progress): Recovery Tokens are being issued to creditors within 60 business days of the scheme’s effective date. The framework for RT buybacks is established, with purchases driven by net shared profits, recoveries from illiquid wallet assets, and stolen asset recoveries. However, the actual value of these tokens remains dependent on WazirX’s ability to generate revenue and recover stolen funds over the next three years.

ALSO READ: WazirX Latest News: Court Updates & User Payouts Explained

WazirX Restructuring First-Order Consequences: Immediate Impacts

For Users

Substantial Recovery Achieved: Users have received 75-85% of their funds based on July 18, 2024, balances, delivered in cryptocurrency. 

Recovery Token Allocation: The remaining 15-25% is being distributed as Recovery Tokens, which provide users with claims on future profits and asset recoveries. While these tokens offer upside potential, their ultimate value remains uncertain and depends on WazirX’s operational success over the next three years.

For WazirX

Operational Restart: WazirX successfully avoided liquidation, which could have delayed recoveries until 2030 and resulted in significantly lower payouts. The platform is now operational and has a framework to rebuild its business.

Regulatory Compliance: The approved scheme involves distribution through Zanmai India, a reporting entity under India’s Financial Intelligence Unit, ensuring compliance with local regulations. This regulatory alignment helps legitimise operations in India’s evolving crypto space.

WazirX Restructuring Second-Order Consequences: Broader Ripple Effects

For the Crypto Ecosystem

Precedent for Structured Recovery: The WazirX case has established a framework for court-supervised crypto exchange insolvency in Asia. Unlike the chaotic collapses of exchanges like FTX, WazirX’s structured approach with creditor voting, court oversight, and phased distributions offers a model for handling future exchange failures.​

Enhanced Focus on Custody and Security: The hack and subsequent recovery have intensified focus on institutional-grade custody solutions. WazirX’s partnership with BitGo and the emphasis on security infrastructure reflect industry recognition that self-custody or institutional custody arrangements are critical for exchange credibility.​

Regulatory Clarity Through Legal Process: The Singapore High Court’s handling of the WazirX case, including initial rejection followed by approval of a revised plan, demonstrates the importance of regulatory compliance in crypto restructuring. The requirement to route distributions through an Indian regulated entity (Zanmai India) highlights the cross-border regulatory complexities in crypto operations.

For Users

Partial Recovery vs. Full Compensation: While 75-85% recovery is substantially better than liquidation scenarios, users still face permanent losses. Those who held appreciating assets may particularly feel the impact, as the July 18, 2024 valuation date means they missed subsequent market gains on their full holdings.​

Recovery Token Uncertainty: The value of the 15-25% distributed as Recovery Tokens remains speculative, depending on WazirX’s ability to generate profits, recover stolen assets, and execute its DEX and revenue initiatives over three years. Unlike liquid crypto distributions, RTs represent long-term claims with uncertain outcomes.

WazirX Restructuring: Possible Outcomes

Primary Scenario (Currently Unfolding): The scheme has been approved and implemented, with 75-85% distributions successfully completed and platform operations restarted on October 24, 2025. WazirX has avoided liquidation and provided substantial relief to users. The critical question now shifts to whether the platform can generate sufficient revenue over the next three years to make Recovery Token buybacks meaningful and whether users will return to trade on the platform despite reputational damage.​

Recovery Token Value Scenarios:

25% likelihood: WazirX successfully launches its DEX, builds trading volume through its zero-fee restart offer, recovers portions of stolen funds through law enforcement cooperation, and generates profits enabling substantial RT buybacks over three years, bringing total recovery closer to 95-100%.​

50% likelihood: The platform maintains modest operations, generates limited profits, and conducts partial RT buybacks, ultimately providing users with 80-90% total recovery. Some RTs retain residual value on secondary markets, but at discounted rates.

Conclusion: A High-Stakes Gamble

WazirX’s restructuring scheme has achieved what seemed uncertain just months ago: court approval, overwhelming creditor support (95.7%), timely implementation of distributions, and successful operational restart. Users have received 75-85% of their funds in cryptocurrency, avoiding the years-long delays and minimal recoveries typical of liquidation scenarios.​​​

However, uncertainties remain. The ultimate value of Recovery Tokens depends on WazirX’s ability to generate profits, launch new revenue streams like the announced DEX, and potentially recover stolen funds over the next three years. The platform’s ability to rebuild user trust and trading volume in a competitive market will determine whether the 15-25% represented by RTs becomes meaningful or remains a symbolic gesture.​

For users, the restructuring offers substantial but incomplete relief. The 75-85% immediate recovery is a tangible outcome that exceeds many crypto exchange failure scenarios. The platform’s successful restart on October 24, 2025, with zero trading fees, provides access and utility. Yet the psychological and financial toll of the hack, combined with the opportunity cost of assets locked at July 2024 valuations, represents lasting damage.

For the broader crypto ecosystem, WazirX’s court-supervised restructuring establishes a precedent for handling exchange failures with transparency, creditor participation, and phased distributions. The case underscores the critical importance of institutional-grade custody and security infrastructure in maintaining platform viability.​

The WazirX story is not yet complete—it has transitioned from crisis to structured recovery, with the final chapter depending on execution over the next three years.

FAQs

What is the WazirX Restructuring Scheme, and what has been achieved?

It’s a court-approved recovery plan (Singapore High Court, Oct 13, 2025) to repay users hit by the July 2024 $235M hack. The scheme took effect on Oct 15, and WazirX resumed operations on Oct 24 with 75–85% user fund recovery and zero-fee trading at launch.

How have users recovered their funds under the scheme?

Users received 75–85% of balances (as of July 18, 2024) in crypto within 10 business days. The remaining 15–25% is being issued as Recovery Tokens (RTs), redeemable through platform profits and asset recoveries over 36 months.

3. What are Recovery Tokens, and what value do they hold?

RTs represent the 15–25% of claims pending recovery. They’re backed by WazirX’s future profits and recovered assets, with buybacks planned through Oct 2028. Their value depends on platform performance and recovery outcomes.