Bombay High Court Verdict Favors CoinSwitch in WazirX Crypto Theft Case

Highlights:

• Bombay High Court rejects Zanmai Labs’ plea, confirming the arbitral tribunal’s orders.
• The court allows CoinSwitch to recover ₹62 crore from the WazirX crypto theft case.
• The verdict strengthens India’s crypto exchange accountability framework.

In the ongoing WazirX crypto theft case, the Bombay High Court ruled in favor of CoinSwitch. Justice Somasekhar Sundaresan turned down a request by Zanmai Labs opposing arbitration decisions. The ruling means that CoinSwitch, which is managed by Bitcipher Labs, can reclaim its stolen cryptocurrency, worth ₹62 crore.

The decision of the court was reached after one year of legal struggle following the massive 2,000 crore hack on WazirX in July 2024. Hackers hit the multi-signature wallets of the platform, draining ERC-20 tokens that constituted 40.5% of the holdings of Bitcipher. Later investigations traced the breach to the Lazarus Group, one of the most advanced cybercrime syndicates in the world.

Justice Sundaresan explained that the arbitral tribunal was justified in ordering Zanmai Labs to provide bank guarantees and escrow deposits. These securities were intended to protect the claim of the investors and to regain trust in the Indian crypto market.

BIG UPDATE: 🇮🇳 The Bombay High Court has allowed CoinSwitch to secure stolen assets held on WazirX after the $234M Crypto theft. pic.twitter.com/p89Tq3buOm

— Sapna Singh (@earnwithsapna) October 10, 2025

Zanmai’s Defense Fails as Court Confirms Responsibility

Zanmai Labs, the company of WazirX, stated that Binance was responsible in terms of cybersecurity at the time of the WazirX crypto theft. The company contended that operational control had been transferred to its parent company, Zettai Pte Ltd, and wallet custodian, Liminal. However, the court did not accept this argument after examining the Broker Agreement signed in August 2022.

According to the bench, there was an agreement that Zanmai had to provide the safety of client assets. It also held that the relocation of the custody of a person without consent was contrary to the fundamental issues of the agreement. The court also condemned the efforts of Zanmai to socialize losses, using a restructuring scheme in Singapore, calling it a lack of legal basis.

The interpretation of the tribunal can not be called arbitrary or illegal, noted Justice Sundaresan. The court confirmed that Bitcipher was required to secure assets stored on the WazirX platform. Moreover, the court decided that the arguments made by Zanmai were not contractually clear and transparent.

Court Ruling Sets New Benchmark for Crypto Accountability in India

This ruling is a milestone towards investor protection in the Indian digital asset sector. The Bombay High Court has strengthened the responsibility of crypto exchanges in the domestic arbitration law by upholding the right of CoinSwitch to recover funds.

The ruling also makes it clear that exchanges cannot bypass liability by restructuring or international jurisdictional claims. Legal experts view this as a significant precedent that assures custodial accountability by the operating party in India.

Additionally, the WazirX crypto theft case demonstrates the significance of wallet security and transparent policies of operation to be adopted by exchanges. It also indicates the willingness of India to control crypto sites by legalizing and providing financial protection.

CoinSwitch, via its legal counsel, Bitcipher Labs, was instrumental in the advancement of asset recovery. The court upheld the arbitration orders where Zanmai was asked to pay ₹45.38 crore and other securities. This consequently underscores that the rights of investors cannot be breached even in complex cyber frauds.

Meanwhile, WazirX’s token, WRX, continues to lose momentum as the case continues. The token has dropped by more than 60% over the past year to trade at $0.04358. Moreover, its market capitalization and trading volume have declined to $16 million and $45k, respectively.