The Supreme Court of India dismissed a petition by 54 WazirX users seeking a criminal probe into a $230 million cryptocurrency hack, citing unclear regulations, in a ruling on April 16, 2025. The decision leaves thousands of affected users with limited legal recourse, intensifying calls for clearer crypto laws in India.
The petition, filed against WazirX, its co-founder Nischal Shetty, Binance Holdings, and Liminal Custody, demanded a special investigation team comprising officials from the Reserve Bank of India, Securities and Exchange Board of India, and other agencies. It also requested a forensic audit of WazirX’s finances and a freeze on its accounts.
The hack, which occurred in July 2024 and was linked to the North Korean Lazarus Group, impacted over 15 million users, leading WazirX to suspend trading and withdrawals.
India’s crypto sector operates in a regulatory gray area, despite a 30% tax on profits and a 1% tax deducted at source on transactions. The Supreme Court, led by Justices BR Gavai and Augustine Masih, advised petitioners to approach other authorities, stating the matter falls under government policy.
“The lack of regulation leaves us in limbo,” said Priyanka Prakash, the advocate representing the petitioners, in an interview with CryptoTimes. “Users are taxed but not protected.”
WazirX has been undergoing a restructuring process under Singapore’s insolvency laws since the hack. On April 12, 2025, the exchange announced a Singapore Court hearing scheduled for May 13, 2025, to sanction its Scheme of Arrangement, which 93.1% of creditors approved on April 7. If approved, asset distribution could begin within 10 business days, potentially covering 80% to 85% of user claims in cryptocurrency.
Nischal Shetty addressed concerns on X, saying, “We’re committed to recovery. The May 13 hearing is a key step forward.”
The court’s ruling has sparked frustration among users, evident in recent X posts. On April 16, Pushpendra Singh shared an image of a protest with signs reading “Reduce Crypto Tax,” captioned “Justice for Wazirx users.” Ajay Kashyap, another user, posted, “If the judiciary can’t act, why are we forced to pay 1% TDS and 30% tax on profits?”
The crypto market remains volatile, with Bitcoin trading at $81,200 on April 17, according to CoinMarketCap. While some users hope for a market upswing to boost their recoveries, others fear further delays will push them to international exchanges.
“This ruling shows the urgent need for regulation,” said crypto analyst Rakesh Jain in a statement to Coinpedia. “Without it, Indian exchanges like WazirX will struggle to regain trust.”
Legal challenges persist, as India’s government has yet to finalize a crypto framework despite years of discussion. The National Consumer Disputes Redressal Commission also dismissed a related WazirX case in March 2025, citing jurisdiction issues, per Livemint. Meanwhile, WazirX continues its $23 million bounty program to recover stolen funds.
The Supreme Court’s decision underscores the regulatory hurdles facing India’s crypto sector, leaving WazirX users in a precarious position. As the May 13 hearing approaches, users await clarity on fund distribution, while advocacy for regulatory reform grows louder.
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