Simply put
- On Friday, India’s Madras High Court decided that virtual currencies are considered property protected by the Constitution, halting WazirX’s attempt to redistribute user assets as part of a restructuring plan in Singapore.
- Judge N. Anand Venkatesh dismissed the exchange’s plan of “socializing losses” and issued an injunction to safeguard 3,532 XRP tokens after a hack in July 2024 resulted in a loss of $234 million.
- Experts note that while this ruling enhances consumer protection for cryptocurrency users and could lead to clearer regulation, India still lacks a comprehensive regulatory framework for digital assets.
A recent court ruling in India has established that virtual currency can be legally considered property. This is a significant win for XRP holders and represents one of the clearest recognitions of the ownership of digital assets in the region.
On Friday, the Madras High Court prohibited WazirX, the country’s largest cryptocurrency exchange, from reallocating its customers’ 3,532 XRP holdings to cover losses from a $234 million hack that occurred last July.
Justice N. Anand Venkatesh noted that the XRP tokens held by users, especially those acquired in January and unaffected by the hack, cannot be used in the exchange’s loss-sharing scheme.
“It is neither tangible property nor currency,” the judge stated, “But it is property and can be profitably enjoyed and owned.”
This ruling gives cryptocurrency assets legal status in India, implying that such holdings must be treated as customer property held in trust.
“This clarity is extremely beneficial. It strengthens consumer protection for crypto holders, affirms their rights as asset owners, and paves the way for a clearer regulatory and fiduciary framework in the Indian crypto ecosystem,” remarked Sudhakar Lakshmanaraja, founder of Digital South Trust.
Justice Venkatesh emphasized that a user “accessed the WazirX platform from his usual place of residence,” which establishes that crypto assets accessed while in India are protected by Indian law.
“Taken together, these judgments represent one of the first major court decisions in India regarding cryptocurrencies,” he added.
Another contributor remarked that these developments signal positive governance standards within the tech sector for all involved parties: exchanges, users, and regulators.
Not your XRP
The court rejected WazirX’s plan for “socializing losses,” which the judge compared to “group insurance for self-help groups.”
Justice Venkatesh stated that such proposals are unenforceable under India’s contractual framework.
Additionally, he dismissed WazirX’s claim that a reorganization approved by a Singapore court would automatically bind Indian users.
This ruling contributes to India’s evolving legal landscape for cryptocurrency protections, even as government regulations are developing slowly. Similar decisions have also recently come from the Bombay High Court, rejecting comparable loss-sharing proposals.
On the same day, WazirX resumed its operations with 95.7% creditor approval.
However, users have reported delays in account verification and thus have seen only about 30% of expected funds being received.
The current crypto policy still appears to be strict, focusing heavily on revenue collection while remaining ambiguous about investor rights and asset ownership rules.
“Ultimately, the courtroom has become the center stage where the future of digital value is debated,” the judges commented, stating that each ruling brings a clearer definition of rights and responsibilities in this era of decentralization.
WazirX was not immediately available for comment.
