Bombay High Court backs CoinSwitch, hands WazirX loss in challenge of 2024 hack

WazirX has lost its appeal in the Bombay High Court after the court ruled in favor of CoinSwitch. According to the high court, CoinSwitch has the right to secure assets stolen during the $234 million hack of the WazirX platform in July 2025.

According to reports, the court dismissed an appeal from Zanami Labs, the operators of WazirX, after it challenged an arbitration order that directed the company to provide bank guarantees to secure claims arising from the cyberattack.

The court also noted that the tribunal acted within its authority and that securing CoinSwitch’s claim was legally appropriate due to the scale of the breach.

WazirX loses appeal, CoinSwitch wins favorable verdict

The dispute began after hackers breached WazirX’s multi-signature wallets in July 2024, stealing ERC-20 tokens valued at $234 million. The hackers were said to have created a fake WazirX account, deposited tokens, and purchased GALA tokens.

After draining the hot wallet, they also accessed the cold wallets. When the signatories accessed the wallet, the hackers altered the smart contract control. After it was modified, they gained full control and drained all the funds.

According to reports, CoinSwitch maintained broker accounts of WazirX, losing a significant portion of its funds in the attack. After the breach, CoinSwitch and Nextgendev Solutions approached an arbitration panel seeking security for the stolen assets.

The tribunal overseeing the proceedings issued orders on December 24 and March 2025, instructing Zanami Labs, the operator of WazirX, to deposit bank guarantees of about Rs. 45.38 crore in favor of CoinSwitch.

However, Zanami Labs argued that the hack was beyond its control and blamed Binance for cybersecurity failures. Binance had previously managed WazirX’s infrastructure. The court ruled against the claim, rejecting it on the premise that the Broker Agreement between CoinSwitch and Zanami Labs carried clear operational obligations that could not be shifted to a third party.

Justice Sundaresan mentioned that “the arbitral tribunal interpreted the contract reasonably and acted within its mandate,” meaning that Zanami Labs’ challenge is without merit.

Next steps in the restructuring and rebuilding

The ruling also addressed the assertion made by Zanami, which mentioned that its Broker Agreement with CoinSwitch was only a tax-related arrangement. It rejected the claim and affirmed that the agreement had major legal implications regarding operational responsibilities.

As reported by Cryptopolitan, the crypto exchange has mentioned that it is complying with the order passed by the Singaporean court regarding the court-mandated deadline in the restructuring case that was attached to the cyber attack.

Before then, the company unveiled a $70 million recovery program for its users. According to the announcement made at the time, CoinSwitch was tasked with distributing the funds to WazirX users over two years.

Affected users will receive funds in INR or crypto without the option of lock-in, allowing flexibility in trades and withdrawals. The exchange said it plans to track claims once it reopens its crypto withdrawal system, noting that it was put in place to ensure fair distribution of funds based on user losses.

With all submissions now filed, the High Court is expected to fix a hearing date. The decision will affect the future of WazirX and its restructuring plans, which aim to balance creditor claims with the exchange’s ability to recover and rebuild.

In its recent update, the exchange claimed that 95.7% of its creditors and 94.6% of approved claims voted in favor of its amended restructuring proposals. The results were also confirmed independently by Alvarez & Marsal (SE Asia) Pte Ltd’s Joshua Taylor and Henry Anthony Chambers, who claimed that there is solid support for the adjusted plan.

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