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The Madras High Court has ruled against WazirX redistributing user’s XRP holdings following its 2024 hack, declaring that cryptocurrencies qualify as property under Indian constitutional law.Summary
WazirX was barred from reallocating 3,532 XRP tokens belonging to an unaffected user under its “socialisation of losses” plan following a $234 million hack. The court rejected WazirX’s argument that its Singapore-based restructuring automatically applied to Indian users, asserting domestic jurisdiction over crypto holdings accessed in India. The court declared that cryptocurrencies qualify as property under Indian law and can be held in trust. WazirX barred from redistributing user’s XRP under its “socialisation of losses” plan The Madras High Court, one of the High Courts of India, has ruled that cryptocurrencies qualify as “property” under Indian constitutional law and are capable of being held in trust. The ruling came in a case involving user holdings on the Indian-operated platform of WazirX, following a major security breach in 2024.
The court heard the plea of an individual whose account held 3,532 XRP tokens that were unaffected by the hack but were set to be diluted under WazirX’s proposed “socialisation of losses” plan. The plan, approved in Singapore as part of a restructuring process, would have spread the losses from the July 2024 hack—reported at approximately $234 million —across all users, including those whose assets were unaffected.
WazirX argued that its Singapore-based restructuring governed its Indian users, but the court disagreed. Justice N. Anand Venkatesh held that the petitioner’s crypto holdings were held “by means of the WazirX platform” in India, and thus the court exercised domestic jurisdiction.
He directed the Indian operator, Zanmai Labs Pvt Ltd, to furnish a bank guarantee corresponding to the value of the frozen XRP while the matter is resolved. The court emphasised that the tokens must remain with the user and cannot be reallocated without proper legal basis.
The Madras High Court’s decision arrives amid India’s slow progress toward comprehensive crypto regulation. While the country enforces a 30% capital gains tax and 1% tax TDS on crypto trades, it still lacks legislation defining ownership rights, investor protections, or exchange accountability.
By treating crypto as property in this decision, the court has provided a crucial legal benchmark that strengthens investor protections and could guide the development of future regulatory frameworks.