- India Supreme Court dismisses WazirX hack victims’ criminal petition against WazirX, Binance, and Liminal Custody
- Court cites India’s unclear cryptocurrency regulations as reason for rejecting the ~$234 million hack case
- Ruling highlights crypto legal gap; separate WazirX restructuring plan aims for 85 percent asset return to victims
In a major setback for victims of the July 2024 WazirX cryptocurrency hack, the Supreme Court of India today dismissed a criminal petition filed by over 50 users seeking action against the exchange’s management, including co-founder Nischal Shetty, as well as Binance Holdings and Liminal Custody.
The court explicitly cited the unclear regulatory landscape surrounding cryptocurrencies in India as its reason, stating it was “not inclined to entertain the plea.“
The petition, which detailed allegations of severe negligence, poor management of user assets, and inadequate security protocols leading to an estimated loss of over 2,000 crores (approximately $234 million) was presented before a bench comprising Justice BR Gavai and Justice Augustine Masih. However, the bench swiftly dismissed the case.
Justice Gavai explicitly stated the court’s reluctance to intervene, advising the victims to “make representation to the authorities and let it be decided in accordance with law.” The dismissal was confirmed to The Crypto Times by advocate Priyanka Prakash, representing the aggrieved WazirX users.
Related: WazirX Moves Closer to Resuming Operations Following Creditor Vote
Why Did India’s Supreme Court Dismiss the WazirX Hack Case?
The petitioners, who had previously approached the Delhi High Court without success, were seeking a criminal probe into the massive cyberattack that had left an estimated 4.4 million Indian users stranded since July 2024.
This outcome highlights user frustration, with some market participants noting the irony of India imposing a 30% tax on crypto gains while offering unclear legal recourse for major losses. This regulatory gap is seen by some as hindering legal action, placing focus on regulators like the RBI and SEBI to provide clarity.
WazirX’s Plan to Repay Hack Victims (Separate from Court Case)
While this Supreme Court avenue closed, WazirX announced a separate restructuring plan last month. Approved by a Singapore court, the plan promises to eventually return 85 percent of lost assets to affected investors.
Related: Using Binance in India? Tax Crackdown Targets 1% TDS Dodgers Harshly
A recent WazirX press release stated over 93.1% of voting creditors (representing 94.6 percent of funds) support this restructuring proposal. The plan’s next court hearing is scheduled for May 2025.
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