Madras High Court Rules XRP Is Property in Landmark WazirX Case

In a major ruling that could reshape how India views digital assets, the Madras High Court has temporarily stopped WazirX from reallocating a user’s frozen $XRP holdings, marking a crucial win for Indian crypto users affected by the exchange’s 2024 hack. The decision recognizes cryptocurrency as a form of property that can be held in trust, a stance that could set a powerful legal precedent for future crypto disputes in India.

Crypto as Property, Not Exchange Asset

Justice N. Anand Venkatesh issued the order on October 25, directing Zanmai Labs, WazirX’s Indian operator, to provide a bank guarantee worth ₹9.56 lakh (around $11,500), the value of the petitioner’s 3,532 $XRP, until arbitration proceedings conclude. The judge stated that “cryptocurrency is property capable of being enjoyed, possessed, and held in trust,” establishing a clear distinction between the exchange’s control and the user’s ownership rights.

This recognition effectively challenges the notion that exchanges have absolute authority over users’ digital assets, strengthening the argument that crypto belongs to the user, not the exchange.

Clash Between Indian Users and Singapore Restructuring

The case stems from WazirX’s controversial restructuring plan, managed through its Singapore-based parent company, Zettai Pte Ltd. After the $230 million hack in July 2024, WazirX froze withdrawals and proposed a “socialized loss” scheme. Under the plan, affected users would receive “recovery tokens” and partial repayments once the exchange resumed operations, an approach recently approved by the Singapore High Court.

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However, the petitioner, Rhutikumari, argued that the exchange’s move to redistribute her $XRP without consent violated her ownership rights under Indian law. The Madras High Court sided with her, halting WazirX’s reallocation and affirming that her crypto holdings must remain protected until the dispute is resolved.

Implications for India’s Crypto Legal Framework

This decision could have far-reaching consequences for how Indian courts handle crypto disputes involving foreign-registered exchanges. By acknowledging that crypto assets can be held in trust, the ruling gives Indian users a stronger footing to challenge overseas corporate actions affecting their holdings.

For thousands of WazirX users still awaiting restitution from the 2024 hack, the judgment offers a glimmer of hope, a sign that India’s judiciary may prioritize user ownership and local legal protection over foreign corporate restructuring.