Delhi High Court Notice To Central Government On WazirX Crypto Asset Restructuring

Delhi High Court Notice To Central Government On WazirX Crypto Asset Restructuring

The hearing is scheduled for 29 April

The Delhi High Court has issued a notice to the Government of India on an interim application, seeking to restrain the users’ disposal and restructuring of cryptocurrency exchange WazirX.

The bench of Justice Sachin Datta granted two weeks to the respondents to reply.

The petitioners, Sudhir Verma and Kunal Dhariwal, submitted that the alteration initiated without consent violated their rights. They added that it impacted assets unaffected by the 18 July 2024 cyberattack and raised data protection concerns.

Instituted in October 2024, against the Central government and others, the application was moved in a pending writ petition.

The plea raised concerns about a proposed 12 March 2025 Scheme of Arrangement (SoA), initiated by Zettai Pte Ltd regarding the management and redistribution of virtual digital assets (VDAs) held by users on WazirX platform.

It was alleged that under the proposed restructuring, unaffected crypto assets (now worth nearly Rs.4,400 crore) were subjected to rebalancing and liquidation to meet the liabilities and operational expenses of Zettai. This included legal and administrative costs of Rs.2700 crores.

The SoA allegedly imposed conditions on users to withdraw legal proceedings and indemnify the platform, regardless of their consent.

The petitioners questioned the neutrality of the voting process by a private advisor and flagged data protection concerns from sharing the personal and financial information of over four lakh Indian users with foreign entities.

They further contended that the restructuring was being pursued before the High Court of Singapore to bypass Indian scrutiny, depriving the users of an effective legal remedy within the country.

The principal writ petition sought the constitution of a Special Investigation Team (SIT) of experts from cybercrime, financial fraud, and digital asset regulation to probe the cyberattack on WazirX and ensure the applicability of Indian laws.

The petitioners are being represented by advocates Navodaya Singh Rajpurohit, Rithik Dhariwal, and Dhawesh Pahuja.