WazirX Eyes 'Panama' for Fresh Start After Revival Plan Rejected in Singapore

Crypto exchange WazirX suffered a major setback after the Singapore High Court rejected the restructuring plan submitted by Zettai Pte Ltd in November 2024. The proposal came following a $235 million cyber theft that had hit the platform in July last year. Notably, North Korea-based hackers stole nearly half of the exchange’s crypto reserves.

After the cyberattack, Zettai submitted the restructuring plan as a part of WazirX’s insolvency proceedings. However, the platform later proposed a rebalancing scheme in November, aiming to repay 52% of total creditor claims using its remaining liquid assets worth $284 million. Although the proposal was approved by creditors it still needed the court’s approval to be implemented.

And the court observed that WazirX-led operating entity Zettai was not registered in India. Hence, the restructuring scheme shall not be valid, as per The Economic Times report. Responding to court’s order, WazirX said it will appeal against the decision and evaluate all legal options.

To note, Zettai is a Singapore-based firm, which is not registered with India’s financial crime watchdog --- the Financial Intelligence Unit (FIU-IND). This authority enforces compliance and reporting norms for crypto platforms. In India, WazirX operates through a different entity, Zanmai Labs.

WazirX's Escape Route

The platform has set up an entity in Panama by the name of Zensui Corporation to continue with its crypto operations without a mandatory Singapore license. The move came amid Singapore tightening the regulatory noose around crypto transactions.

The city state will implement the Financial Services and Markets (FSM) Act, 2022 from June 30. Panama’s relatively lenient crypto regulatory environment makes it a favorable base for Zensui (formerly WazirX). The platform is expected to operate more seamlessly there, benefiting from simplified compliance requirements and ensuring uninterrupted service for its users.

WazirX's Crypto Theft

As per media report, North Korea’s Lazarus Group, known for its cyber warfare tactics, launched the cyberattack on WazirX and reportedly steal $235 million worth of cryptocurrency in December 2024. The group has also been linked with numerous high-profile global cyberattacks, often aimed at supporting North Korea’s sanctioned regime.

The assets were 45% of the total user funds on the platform. The company after its breach, reportedly suspended its withdrawals and filed an FIR in connection with the cyberattack.

The WazirX team is reportedly working with law enforcement agencies, global cybersecurity experts, and blockchain analytics firms to restore stolen assets. The incident has again sparked discussions about cybersecurity in the cryptocurrency sector, specifically in India, due to the country's ongoing digital transformation.