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In a significant ruling for cryptocurrency users in India, the Madras High Court has sided with an individual XRP holder against WazirX, one of the country’s largest crypto exchanges. The decision highlights growing legal recognition of digital assets as property and sets a precedent for how exchanges can handle user funds in the aftermath of hacks and platform losses.
The Madras High Court in India has granted interim protection to an XRP holder, preventing WazirX from using the user’s 3,532 XRP ($9,400) to cover losses from a $230 million platform hack in July 2024.
Justice N. Anand Venkatesh ruled that WazirX’s planned “socialization of losses” – which would have spread the financial impact across all users – cannot apply to the XRP holder, as the stolen assets were ERC-20 tokens, a different type of cryptocurrency.
The court emphasized that the XRP remains the user’s property and should not be diluted to offset the exchange’s operational failures.
Under the ruling, WazirX must provide a bank guarantee of 956,000 rupees (around $11,500) or deposit the same into an escrow account until arbitration proceedings are complete.
WazirX had recently resumed operations after Singapore’s High Court approved a restructuring plan backed by 96% of participating creditors. The platform had been suspended for 16 months following a hack attributed to North Korea’s Lazarus Group exploiting a flaw in its multi-signature wallet system.