BREAKING: Court Greenlights CoinSwitch Recovery of $5 Million Frozen on Hacked WazirX Platform
Digital asset exchange scores legal victory in ongoing crypto security saga
THE LEGAL BREAKTHROUGH
CoinSwitch just secured judicial approval to reclaim $5 million in digital assets stranded on WazirX following a major security breach. The court order cuts through regulatory red tape, allowing immediate recovery operations to commence.
SECURITY FALLOUT
The hack exposed critical vulnerabilities in exchange infrastructure—yet another reminder that in crypto, your keys aren't just your coins, they're your lifeline. While traditional finance builds taller walls, blockchain proponents argue the future lies in better locks.
INDUSTRY IMPLICATIONS
This ruling sets precedent for how exchanges handle post-hack asset recovery. It bypasses traditional financial mediation channels, proving decentralized solutions can move faster than legacy systems—even when cleaning up centralized messes.
Because nothing says 'financial revolution' like needing a judge's permission to access your own digital money.
Legal implications
Navodaya Singh Rajpurohit, legal partner at Coinque Consulting and one of the lawyers representing creditors in a separate petition seeking a Special Investigation Team into the hack, explained the judgment's significance to Decrypt.
"The judgment reiterates the Wander v. Antox standard—appellate courts won't disturb interim discretion unless it's 'perverse or implausible'—and finds no basis to upset the Tribunal's arrangement,” Rajpurohit said.
The Court found Zettai was "never in the picture in the contract between the parties" and could not be used to justify transferring Zanmai's contractual obligations, the lawyer noted.
The judgment pointed out "a high degree of ambiguity" regarding disputes between Zettai and Binance, Rajpurohit noted, as WazirX founder Nischal Shetty refused to disclose details in Singapore court affidavits, citing "confidentiality."
"The Court held that a vulnerable party whose assets are frozen is entitled to protection pending adjudication," Rajpurohit noted. "The view that users' assets should not 'stand eroded due to a security lapse' was deemed 'not at all an unfair or an improper finding'."
WazirX froze withdrawals after the July 2024 hack that hit 40.5% of CoinSwitch’s holdings, prompting CoinSwitch to sue for recovery while using its treasury to keep a 1:1 user reserve.
The ruling dismissed Zanmai's petitions and directed that contempt proceedings be heard on November 11, 2025.
