The world of cryptocurrency thrives on trust. Trust in technology, in exchanges, in the belief that your digital assets are safe. When that trust breaks, it shakes more than just wallet balances.
In the case of WazirX, an Indian-originated exchange now in dispute with its Singapore parent company Zettai Pte Ltd, users are fighting not just for money locked away. They are also fighting for legal recognition of ownership, clarity, transparency, and accountability.
This story begins years ago, grows through boom and scandal, hits a breaking point in mid-2024, and in 2025, users have pressed their legal claims, distilled into categories, affidavits, schemes, and court orders.
WazirX: From Startup Promise to Crisis
WazirX was founded in India in 2018 and became one of the largest crypto exchanges in the country, with thousands of users buying and selling Bitcoin (BTC), Ethereum (ETH), and other coins. The platform offered custody of user funds, wallet services, deposits and withdrawals, trading, etc. Over time, it expanded operations, attracted users, and became associated with Binance for a while.
Then trouble. In July 2024, WazirX reported a hack of $234 million (INR 2,000 crore). The claim was that certain tokens had been stolen. Users began to face problems withdrawing, and over time, complaints mounted that the company’s Singapore entity, Zettai Pte Ltd, was grouping all user assets, including unaffected ones, into corporate restructuring schemes.
Users felt their unhacked crypto and fiat money were being frozen improperly, or misclassified, so that losses would be shared widely instead of the company bearing its own obligations.
As legal and regulatory scrutiny increased, users began organizing. One user, Romy Johnson, known as Toofaan Army on X, who has been actively posting about WazirX and researching WazirX data to help hack victims, emerged as a representative of a group of “Category A,” “Category B,” and “Category C” users in court documents in Singapore. These represented different kinds of assets: those unaffected by the hack, fiat balances, and those allegedly hacked.
What Romy Johnson’s Affidavit Claims
Johnson’s affidavit and submissions before the Singapore High Court are central. These are some of its core arguments:
Categorization of Assets
Johnson defines three categories of user assets:
- Category A: This classification comprises unhacked crypto assets. These include non-ERC20 tokens such as Bitcoin (BTC), XRP, Tron (TRX), Binance Coin (BNB), Solana (SOL), and USDT (TRC-20). These were held in segregated custodial wallets, unaffected by the 2024 hack, traceable to user deposits. Johnson asserts these must be excluded from any restructuring or moratorium that might harm their value.
- Category B: This category belongs to Fiat balances (Indian rupees or “INR”) managed by Zanmai Labs Pvt Ltd, the Indian entity associated with WazirX. These were not impacted by the hack and were regulated by Indian authorities. Johnson says these should be returned or properly reclassified.
- Category C: The hacked assets. These are mostly ERC-20 tokens such as Ethereum (ETH), Shiba Inu (SHIB), Polygon (MATIC), USD Coin (USDC), Chainlink (LINK), plus many other altcoins. Johnson acknowledges these are legitimately compromised under the restructuring proposal.
Ownership, Custody, Legal Rights
Johnson argues that unaffected user crypto (Category A) and fiat assets (Category B) are held in a custodial trust or agency relationship and are not assets of Zettai. That means they remain the beneficial property of the users.
Zettai cannot treat them as unsecured debts. The user agreement, Johnson claims, shows Zettai and or its Indian affiliate acts as agent or custodian, not owner. There is no clause in the agreements that transfers title or ownership to Zettai.
Under both Singapore law and analogous precedents, possessions held in trust or custodial relationships cannot be swept up into restructuring unless user consent or a legal mechanism exists.
Challenge to Zettai’s “Hack” Explanation
Johnson questions whether the hack was an external breach. Some blockchain records show that tokens moved via multi-signature wallets inside Zettai’s infrastructure, which require multiple authorizations. Users are asking who authorized them. Johnson alleges a lack of clarity. If internal actions moved funds, that is different from a hack; legal responsibility changes.
Legal Procedure, Misclassification, Court Filings
Johnson rebuts affidavits filed by company insiders, notably Nischal Shetty, WazirX CEO and co-founder and Arka Majumdar Partner at Argus Partners, who claim users have no ownership of specific crypto, that their claims are unsecured, etc. Johnson’s documents lay out where those arguments conflict with the law regarding agency, fiduciary duties, and trust law.
The Singapore court has already rejected earlier versions of Zettai’s restructuring scheme because it hid links to offshore shell companies. Users and creditors raised concerns about transparency, voting unfairness, and reserve proofs.
The court has directed new affidavits under Indian law from “Relevant Non-Parties” because previous ones did not comply. Several deadlines have been set in September 2025 for refilling, replies, and final submissions.
What the Court Has Done So Far?
Here are the main judicial and procedural developments:
In the Singapore High Court, Zettai Pte Ltd sought a Scheme of Arrangement to manage its restructuring, moratorium on liabilities, etc. WazirX users and creditors opposed. The court had concerns regarding the inclusion of unaffected assets, fairness, and transparency.
The first scheme was rejected because of a lack of disclosure, links to offshore entities, and unclear identification of which assets are secured vs unsecured.
The court allowed a revote on an amended scheme (HC/SUM 940/2025) after Zettai revised its proposal. The moratorium on Zettai’s operations was extended until September 16, 2025.
New deadlines: Relevant Non-Parties must file a proper Indian law expert affidavit, then reply by Zettai, then both sides make final submissions by 26 September 2025.
WazirX’s own announcements mention that after the revote, if the amended scheme is approved by creditors and sanctioned by the court, then Zanmai India (the Indian entity) will distribute tokens within about 10 business days of the effective date.
What The Documents Say: Major Legal Highlights
From the affidavits and submissions:
Johnson demands the immediate return of unaffected Category A tokens. He insists Zettai has no legal basis to hold them.
He claims Zettai breached fiduciary duty and trust relationship obligations by not informing users, mixing assets, or treating user custodial assets as part of company liabilities.
He argues that Singapore law under the Insolvency, Restructuring and Dissolution Act (IRDA) requires that only debts and liabilities may be included in a scheme of arrangement; user assets held in trust are not debts, and cannot be included without user consent.
Lack of title transfer or a clear contractual provision in the user agreement to treat user assets as company property is a point repeatedly emphasized. The user agreement says the wallet allows storing, sending, and receiving of cryptocurrencies. It does not say the user grants ownership of coins to Zettai or Zanmai.
Users assert blockchain records and other technical proofs show some movement of “hacked” tokens via internal multi-sig wallets (not standard hack behavior), which raises the question of whether outside actors, internal mismanagement, or something else.
The need for accountability has become even more important after a recent case in the Kerala High Court, WP (C) 5356/2025, Romy Johnson vs Union of India and others. One of the main requests in the case was to appoint an external auditor or expert to check and audit WazirX’s transactions.
Responding to growing concerns, the government has now made it mandatory for all cryptocurrency exchanges to undergo cybersecurity audits, following a rise in cyber thefts.
What This Means for Users?
All this is not just legal theory. For people whose funds are locked and inaccessible, the stakes are high.
If the court accepts Johnson’s arguments, then thousands of users with Category A unhacked assets may get them back quickly, rather than waiting for the entire restructuring.
It also sets a precedent: exchanges may in future be legally required to distinguish clearly between compromised and safe assets, maintain segregated custodial wallets, disclose ownership structure, and only include assets in restructuring if they are legally part of the entity’s estate.
Trust in exchanges depends not just on promises but on a clear legal status. Users will expect transparency around wallet movements, multi-sig approvals, audits, etc.
On the flip side, if Zettai’s scheme is approved with unaffected user assets swept into its moratorium or restructuring, users could lose value or access for a long time.
Putting It All Together
Here is the narrative: WazirX built a big user base by holding user assets. When trouble came in the form of a security breach in July 2024, users noticed that Zettai was not only asking them to share the loss but also wanted to use unaffected assets to pay for liabilities. Users resisted, saying that their unhacked tokens are not part of Zettai’s debts. Romy Johnson’s legal filings crystallize these claims.
The court has so far pushed back on Zettai’s earlier proposals, ordered more transparency, required a revote, asked for correct affidavits, and set deadlines. The process is slow. Distribution is not happening yet for many users. But momentum is with those making legal arguments around ownership, trust, and custody.
What Is Still Unclear?
There are some gray areas:
Exactly how many tokens are affected, and precisely which users are in Category A vs B vs C, remains somewhat unquantified in public documentation.
The nature of the “hack” remains disputed. Whether external hackers, internal mis-authorized transfers, or other operational failures.
The actual traceability of assets via blockchain needs technical verification and audit. Users want names, logs, and proof. Whether the court demands will push for that remains to be seen.
Even when the Scheme is sanctioned and asset distribution starts under Zanmai India, how fast, how fairly, what fees or losses may be taken is uncertain.
Legal Ownership Under Indian Law
In addition to Singapore court documents, there are legal opinions asserted under Indian law in the screenshots you shared. They say, among other things:
Cryptocurrency users under Indian law are proprietors of their digital assets. Exchanges like Zanmai India or Zettai act in a custodial capacity. They do not have beneficial ownership. The document notes that cryptocurrency users are the actual proprietors of their digital assets, while exchanges function only as custodians without any beneficial ownership rights over those assets.
Zettai cannot unilaterally include Indian users’ assets under a Singapore restructuring scheme. Foreign court orders are not automatically enforceable in India unless decided on the merits.
Any attempt by Zettai to subsume relevant persons’ cryptocurrencies into the latest scheme without their consent would be contrary to Indian law and would be binding on Indian users.
Withholding cryptocurrency of “unaffected users” is a breach of trust, deficiency of service, and could be potential criminal misappropriation under the Indian Penal Code (IPC) or similar laws.
The documents state that Zettai has no legal entitlement to withhold the cryptocurrencies of unaffected users, which constitutes a breach of trust and amounts to potential criminal misappropriation under IPC/BNS. This indicates that users in India have independent legal arguments separate from the proceedings in Singapore.
Why It Feels Personal?
For many Indian users, this has become deeply personal. Unhacked funds that should never have been touched feel locked because of corporate decisions, cross-border legal technicalities, and delays.
The idea that your crypto, which you trusted a platform with, could be treated as part of someone else’s bankruptcy estate without your consent is highly concerning. The legal documents show user frustration with a lack of transparency, slow responses, conflicting statements, and missing proofs.
What To Watch Next?
These are key things to keep an eye on:
- The revote’s outcome on the amended Scheme of Arrangement: If users vote it down, Zettai will need a different plan. If approved, what exactly does it allow Zettai and Zanmai India to do?
- The final court decisions on whether the unaffected assets (Category A and Category B) must be released immediately.
- Whether the Singapore court upholds that only liabilities and debts can be in a scheme, and that assets held on trust cannot be included without express user consent.
- How Indian law courts respond, especially about foreign court orders, beneficial ownership, fiduciary duty, criminal misappropriation claims, and deficiency of service.
- Audits or blockchain forensic reports that show who moved what, when, and under what authorization.
Conclusion
WazirX’s story is just one among many in crypto where users felt caught between promises and legal limbo. But the difference here is that the legal documents show very clear, articulate claims. Not just emotion or outrage but factual categorization, precedents, contractual analysis, combined with jurisdictional arguments both under Singapore law and Indian law.
If the courts decide in favor of user claims, this could mark a turning point: exchanges everywhere will have to treat client holdings more like trust property, more transparent with proofs, and more careful about what they include in restructuring. If not, many users could lose significantly or have their assets frozen for years.
For now, the fight is ongoing. The proofs are being assembled. The affidavits filed. The revote is looming. The question remains: will legal ownership be restored to the rightful owners, or will users continue to wait with their funds in limbo?
Also Read: Is a Key Signature Still Holding Back WazirX’s Recovery Plan?
