The National Consumer Dispute Relief Commission (NCDRC) declined to hear the lawsuit from a group of Wajirux investors who suffered losses from a $234 million crypto hack.
Investors who approach the Supreme Court next
The committee said crypto transactions are not fully regulated in India and therefore cannot be investigated. The NCDRC said there is no legal basis for the allegations in the suit against Wazirx, as cryptocurrencies are not officially recognized as investment assets in India, even fiat currency.
Investor attorney Aman Lehaan Khan is planning to approach the Supreme Court next to seek recovery of lost funds and criminal cases against the entities and individuals involved.
Despite the set, there are some positives
The lawyer said the decision was a setback, but there were some positives. The Consumer Forum agreed that cryptocurrencies are considered “commodities” under the Consumer Protection Act and are also treated as property under the Income Tax Act. The complaint was filed by 40 investors claiming they lost $12 trillion (approximately $1.4 million) in cryptocurrency.
Cryptocurrency is not legal currency in India, but the government taxes crypto profits at 30%. All exchanges must register with the Financial Information Unit (FIU) under the Ministry of Finance. Cryptocurrencies and regulations for the official digital currency bill for 2021 were planned, but they were not introduced and the crypto space is not regulated.
The Supreme Court’s decision is now awaited. In 2020, it lifted the RBI’s ban on crypto trading in 2018, and later criticised the government for not setting clear rules on crypto trading and fraud investigations.
Users who will collect stolen codes by April
In particular, Wazirx, led by Nischal Shetty, is planning a major restructuring to allow customers to recover some of their $234 million lost in hacking.
Wazirx recently pledged to return 85% of the lost assets to investors through a restructuring plan approved by a Singapore court. The company has eight online town halls with its customers, but has yet to announce its next step.
The plan includes releasing $284 million in liquid assets and issuing recovery tokens to affected users. After recalibrating the liabilities, these assets are distributed as tokens to creditors. The rebuild also includes revitalizing the Wazirx platform with new decentralized exchanges and enhanced features. Profits from the first three years after revitalization will be used to buy back the recovery token.
The plan was approved by the Singapore Court, and Wazirx completed the rebalancing process and allowed users to claim stolen cryptography by April.
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