The National Consumer Disputes Redressal Commission (NCDRC) has declined to hear a case from WazirX investors who suffered losses due to a $234 million crypto hack.
Investors To Approach Supreme Court
The commission stated that since crypto transactions aren’t fully regulated in India, it cannot investigate the matter. Cryptocurrencies are neither legal tender nor officially recognized as investment assets in India, so the lawsuit’s claim of financial fraud against WazirX lacks legal basis. The investors’ lawyer, Aman Rehaan Khan, plans to approach the Supreme Court next, seeking recovery of lost funds and criminal proceedings against involved parties.
Some Positives Despite the Setback
Khan mentioned that despite being a setback, the decision had positive aspects. The consumer forum agreed that cryptocurrencies are considered 'goods' under the Consumer Protection Act and also as property under the Income Tax Act. The complaint was filed by 40 investors claiming losses of around INR 12 crore (about $1.4 million). Crypto isn’t legal tender in India, but the government taxes crypto profits at 30%. All exchanges must register with the Financial Intelligence Unit (FIU) under the finance ministry.
Users to Recover Stolen Crypto by April
WazirX plans a major restructuring to help customers recover some of the $234 million lost in the hack. The company pledged to return 85% of lost assets through a Singapore court-approved restructuring plan. The plan involves issuing recovery tokens to affected users, with assets being distributed as tokens to creditors. The restructuring also includes launching a new decentralized exchange on the WazirX platform. Profits from the first three years post-reactivation will be used to buy back recovery tokens.
The Supreme Court’s decision is now awaited, having previously criticized the government for not setting clear rules on crypto trading and fraud investigations.
