In brief
- India's Madras High Court ruled Friday that crypto constitutes property protected under constitutional law, constraining WazirX from reallocating a user's XRP under its Singapore scheme.
- Justice N. Anand Venkatesh granted an injunction protecting 3,532 XRP tokens, condemning the exchange's "socialization of losses" scheme following the July 2024 hack that drained $234 million.
- The ruling "strengthens consumer protection for crypto-holders and paves the way for clearer regulatory frameworks," though India still lacks comprehensive oversight, experts told Decrypt.
An XRP holder scored a victory in India after a court ruled that cryptocurrencies qualify as property under law, marking one of the country’s clearest legal acknowledgments of digital asset ownership.
The Madras High Court on Friday barred WazirX, India’s largest crypto exchange, from redistributing a customer’s 3,532 XRP holdings to offset losses from a $234 million hack that hit the platform in July last year.
Justice N. Anand Venkatesh said the user’s XRP tokens, purchased in January and unaffected by the incident, could not be diluted under the exchange’s “socialization of losses” plan.
“It is not a tangible property nor is it a currency,” Justice Venkatesh wrote. “However, it is a property, which is capable of being enjoyed and possessed in a beneficial form.”
The decision grants legal standing to crypto assets as property capable of ownership and protection under Indian law. It also establishes that assets held in custody by exchanges must be treated as client property held in trust.
"This clarity is very helpful: it strengthens consumer protection for crypto-holders, affirms their rights as asset owners, and paves the way for clearer regulatory and fiduciary frameworks in the crypto ecosystem in India," Sudhakar Lakshmanaraja, founder of Digital South Trust, told Decrypt.
Justice Venkatesh noted the applicant had “used the WazirX platform through her mobile phone from her ordinary place of residence and was prevented from trading or liquidating her holdings,” establishing that crypto assets accessed within India fall under Indian court protection.
“Together, these judgments stand among the first major Indian court decisions on cryptocurrency issues: they are foundational 'crypto-jurisprudence,’” Vikram Subburaj, CEO of Indian crypto exchange Giottus, told Decrypt.
“For all participants (exchanges, users, regulators), these are signals that the high-tech arena will be held to high standards of governance and protection,” Subburaj added.
Not your XRP
At this interim stage, the court questioned WazirX’s “socialization of losses,” echoing the Bombay High Court’s “group insurance of a self-help group” analogy, and sent the merits, including the Singapore scheme’s binding effect, to arbitration.
"Our legal team is carefully reviewing the order and will take all necessary steps in accordance with applicable laws and judicial processes," a WazirX spokesperson told Decrypt. "We remain fully committed to compliance, transparency, and safeguarding the interests of all our stakeholders."
The ruling adds to a growing body of Indian crypto jurisprudence that defines user protections amid the government’s slow regulatory progress. The case follows a Bombay High Court decision rejecting similar loss-sharing measures by Bitcipher Labs.
It also arrived on the same day that WazirX restarted operations, with 95.7% creditor approval.
Users have so far reported receiving only 30% of expected funds amid locked accounts and customer verification delays.
Crypto policy remains lopsided—strict on revenue collection with a 30% levy and 1% TDS, but silent on investor rights or asset ownership rules.
"Ultimately, courts have become the central stage where the future of digital value is debated," the judge wrote. "Through each ruling, they are shaping a clearer picture of rights, responsibilities, and trust in the age of decentralization."
Editor's note: Adds comment from WazirX spokesperson