If you were one of the thousands affected during WazirX’s operational setback in mid-2024, you’ve likely experienced the frustration of having your crypto activity paused—and the questions that followed. What’s next? Can platforms facing such disruptions return assets and resume services while navigating complex regulatory landscapes?
In Singapore, the case of Zettai Pte Ltd is now in the spotlight for tackling exactly that challenge. As Zettai seeks to distribute crypto assets back to users through a court-approved plan, it encountered a key legal question: would Singapore’s Financial Services and Markets Act 2022 (FSMA) stand in the way?
The Monetary Authority of Singapore (MAS) has now provided its view—and that clarification could open the door for lawful, one-time crypto distributions in a compliant and transparent manner.
For platforms like WazirX, which is actively focused on rebuilding, re-earning trust, and restarting its journey, Singapore’s approach offers a compelling reference point. Let’s break down what MAS said—and why it could shape how crypto platforms chart their comeback.
The Legal Crossroads: FSMA and Zettai
At the heart of Zettai’s restructuring is FSMA Section 137(3), which regulates digital token services. Under this section, any business providing such services “with system, continuity and repetition” must be licensed.
Zettai’s restructuring plan, known as the “Scheme of Arrangement,” includes a First Distribution—a one-time crypto payout to affected users. The question was: does this kind of one-off distribution count as a regulated digital token service?
If yes, Zettai would have to register or face penalties. If no, it could go ahead and begin compensating users. This regulatory clarity was essential not just for Zettai, but for all platforms navigating post-hack recovery.
MAS’s Pivotal Clarification
On 26 June 2025, MAS provided its response to Zettai’s legal counsel. The verdict was clear:
“Zettai is not carrying on a business of providing a digital token service under FSMA Section 137(3)” — if the following conditions are met:
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The crypto distribution is one-off;
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It is made to creditors outside of Singapore;
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It is conducted as part of a court-approved scheme;
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It is not for commercial gain, but solely to satisfy creditor claims.
MAS emphasized that without system, continuity, or repetition—and where the intent is not commercial—the distribution does not constitute regulated activity.
Why this matters:MAS has carved out a narrow but important path forward. Platforms in distress now have a clear, regulator-endorsed method to return digital assets without triggering licensing requirements.
Original vs. Amended Scheme: Two Roads to Resolution
Zettai prepared two paths, depending on how the court interprets FSMA:
1. The Original Scheme
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Zettai holds the tokens and executes the First Distribution.
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The platform’s crypto services would restart via Zanmai India, an FIU-IND registered entity in India.
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Zettai would not resume full operations unless legally compliant.
2. The Amended Scheme (if FSMA blocks Zettai from acting directly)
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The crypto assets will be transitioned securely for distribution via an entity that can lawfully facilitate withdrawals under applicable regulations.
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Zanmai India—which is FIU-IND registered and already known to users—will assume full operational responsibility for executing the First Distribution.
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Zanmai India will also resume crypto-crypto services on the platform, ensuring seamless user access and continuity.
Despite structural differences, both schemes ensure that users get their share of remaining assets. The key difference lies in who distributes the crypto and how the platform resumes operations.
Why MAS’s Position is a Lifeline for Crypto Restructurings
MAS’s clarification provides a legal foothold for platforms facing existential crises. Here’s why it’s a breakthrough:
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Regulatory Certainty: Companies no longer have to second-guess if returning assets violates FSMA—so long as the distribution is one-off and court-sanctioned.
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Encourages Lawful Restructuring: Incentivizes distressed platforms to engage with courts and regulators early.
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Guidance for Global Creditors: MAS’s emphasis on non-Singapore creditors adds clarity for international schemes.
What WazirX Users Can Learn From Zettai
While WazirX is not the subject of Singapore’s legal system, the structure and reasoning in Zettai’s case offer a playbook for post-cyberattack recovery:
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Court-supervised schemes backed by proper disclosures and regulatory correspondence increase the likelihood of lawful recovery.
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Separation of platform operations between regulated (FIU-IND) and non-regulated entities is essential for compliance.
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Deed polls and asset transfers can protect user rights while staying on the right side of the law.
For users impacted by cyberattacks, MAS’s position signals that there is a lawful way forward—if platforms take the right steps.
What Happens Next: The July 15 Hearing
Zettai’s case isn’t over. On 15 July 2025, Singapore’s High Court will hear final arguments. Possible outcomes:
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Approval of the Original Scheme if the court agrees with MAS’s interpretation;
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Re-vote on the Amended Scheme if Zettai must transfer assets to avoid FSMA issues;
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Either way, the process of returning assets to users could begin in a matter of weeks.
Zettai is already preparing the logistics for a re-vote, if needed, including a new creditor webinar and expedited verification of claims.
Conclusion
Zettai’s restructuring—and MAS’s timely clarification—have set a new precedent for the crypto industry. By affirming that one-off crypto distributions, conducted under court oversight and without commercial intent, do not fall under FSMA’s regulatory scope, MAS has provided a rare regulatory green light in an otherwise grey landscape.
For users of the WazirX platform and others impacted by cyberattacks, this case shows the value of legal transparency, proactive engagement with regulators, and designing restructuring plans with both users and compliance in mind.
FAQs
Q: Does MAS regulate all crypto distributions?
No. MAS clarified that one-off, court-approved distributions to non-Singapore creditors—done solely to satisfy claims—do not constitute regulated digital token services.
Q: What is FSMA Section 137(3)?
It governs digital token services provided with “system, continuity, and repetition.” It does not apply to isolated, one-time events like a court-ordered asset distribution.
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