From Courtrooms to CBDCs: WazirX Founder Nischal Shetty on India’s Evolving Crypto Sector

The crypto sector in India is navigating a period of transition, marked by renewed trading activity on a crypto exchange, important legal developments, and ongoing discussions about digital currency frameworks. In light of this, WazirX is making an effort at one of the most anticipated recoveries in the domestic market following a significant cyberattack that knocked the exchange offline for over a year. In an exclusive interview with Gadgets 360, founder Nischal Shetty discussed the exchange's phased relaunch, the legal significance of the Madras High Court recognising cryptocurrency as property, and how an INR-backed stablecoin could fit into India's future financial architecture. 

WazirX Founder Outlines Recovery Steps, Legal Milestones, and India's Digital Currency Direction

WazirX resumed trading more than a year after the breach, beginning with limited token pairs and gradually expanding access. The exchange restored markets in phases to manage selling pressure and allow prices to stabilise. INR pairs also reopened in stages. The recovery followed the approval of a restructuring plan in Singapore and aimed to reintroduce trading without affecting liquidity or forcing users into rushed transactions. 

Explaining why the company took this phased approach, Shetty replied: “First and foremost, there is no playbook for something that we have done, which is, despite such a massive attack, we have been able to bring back the exchange. When this happened, our objective was, how do we really get the funds back to people as soon as possible in a legal manner. That is why we chose this whole restructuring path. Just giving the funds back and shutting down would mean taking the loss and walking away, but we wanted to continue building so that we could create more value and distribute it back to the people impacted.” He added, “There were people who wanted to sell immediately, some who wanted to exit entirely, and many who wanted to continue. So the phased restart helped us avoid panic, avoid unnecessary losses for users, and ensure liquidity. We told users not to rush, to wait and compare prices, and that the system would normalise.”

In the weeks after trading reopened, users on X voiced concerns about delays in both INR and crypto withdrawals. Some questioned limits, timelines, or whether withdrawal eligibility had changed. WazirX claims that its support staff still handles individual cases directly and that its withdrawal framework is still in line with pre-attack standards. 

Responding to the concerns, Shetty said, “You do not know how many of those are real and how many are not. It is very easy to create accounts and post issues against entities you do not like or put your own narrative out. If you go deep, you will realise that on our platform, there is no problem with withdrawing INR or withdrawing crypto if you had it before the cyberattack.” He continued: “Whatever was the status quo before the cyberattack is exactly what we restarted with. Some users never had crypto withdrawals enabled even before, so they cannot say it is a new issue. Our support channels have always been open, even during the 15 months of downtime, and that is where we get the real picture. There is no widespread withdrawal problem.”

A recent decision by the Madras High Court that classifies cryptocurrency as property has been interpreted as a step toward greater legal clarity for Indian investors. The decision gives courts and law enforcement agencies a stronger foundation for managing digital assets and may have an impact on future asset recovery procedures, tax treatment, and dispute resolution procedures.

Commenting on the ruling, Shetty said, “Recognising what crypto is is a good thing, because that brings in some sort of clarity. We are trying to get into a regulated ecosystem eventually. Many people think regulation means creating one document, but it is a long journey and progresses through steps like this [...] Crypto can be classified as a currency, an asset, a commodity, or a property. This ruling sets some level of clarity on crypto being a property. Something is better than nothing. It is a better situation than asking the question ‘what is it' and having no definition.”

The government is also exploring the future of an RBI-controlled digital currency and the possibility of an INR-backed stablecoin. While a stablecoin might expand the rupee's use into Web3, decentralised finance, and cross-chain applications, a CBDC is anticipated to increase settlement efficiency within the conventional banking system. Shetty believes the two could complement each other rather than compete. 

Explaining the distinction, Shetty said, “A CBDC enhances the existing INR ecosystem. It improves settlement, makes transfers instant, and removes reconciliation issues between banks. It is not a new use case; it is an enhancement of the current system [...] An INR stablecoin is different. It allows INR to get into the on-chain ecosystem, which is three or four trillion dollars globally. You do not see INR used there today. If you want INR to enter that world, you need an INR stablecoin. It is not CBDC versus stablecoin. Both should exist together.”

Looking ahead, Shetty said WazirX intends to restore full functionality, improve security, and introduce new features such as staking and futures trading based on user demand. He continued by saying that the exchange's long-term objective is still to restore value for consumers impacted by the hack and to boost confidence via openness and compliance.