The Madras High Court of India has ruled that cryptocurrencies qualify as property under law, granting digital assets clear legal recognition for the first time in the country.
Key Takeaways:
- An Indian court has ruled that cryptocurrencies are legally recognized as property in India.
- The court barred WazirX from redistributing a user’s 3,532 XRP to cover losses from its $234 million hack.
- The decision confirms that exchange-held assets belong to clients, not the platform.
The ruling came as the court barred WazirX, India’s largest crypto exchange, from redistributing a customer’s 3,532 XRP to cover part of the platform’s $234 million hack from July last year.
Indian Judge Rules Crypto Is ‘Property,’ Not Currency, in Landmark WazirX Case
Justice N. Anand Venkatesh said the user’s holdings, purchased months before the incident, could not be seized under the exchange’s “socialization of losses” proposal.
“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 confirms that crypto assets held in custody by exchanges must be treated as client-owned property, not assets available for redistribution.
The court rejected WazirX’s loss-sharing plan, which aimed to spread the $234 million loss across all users, likening it to “a group insurance of a self-help group.”
The judge noted that no such clause existed in WazirX’s user agreements, making the proposal unenforceable under Indian contract law.
WazirX had argued that its Singapore restructuring plan, approved by foreign creditors, automatically applied to Indian users, a claim the court dismissed.
The judgment reinforces that Indian customers remain protected under domestic consumer and property laws, even when exchanges operate through offshore entities.
The ruling adds to a growing line of Indian court decisions clarifying user rights in crypto custody cases, following a Bombay High Court verdict earlier this year against Bitcipher Labs’ similar policy.
The decision came on the same day WazirX resumed limited operations after receiving 95.7% creditor approval, though users report access to only 30% of their funds amid ongoing withdrawal and verification delays.
WazirX Resumes Operations After $230M Hack
As reported, WazirX has officially resumed operations as of October 24, marking its return after more than a year of restructuring following the $230 million hack in July 2024.
The Singapore High Court recently approved the exchange’s debt restructuring plan, clearing the way for a phased relaunch.
WazirX will first reopen trading for select crypto-to-crypto pairs and the USDT/INR market, with more listings expected in the coming days.
Founder Nischal Shetty confirmed that INR and crypto deposits are now live, and withdrawals will follow shortly.
As part of the relaunch, WazirX announced zero trading fees across all pairs to attract users back to the platform.
“At the heart of everything we do is our mission to make crypto accessible to every Indian,” Shetty said, adding that the exchange remains focused on regaining user trust and rebuilding liquidity.
WazirX also plans to issue Recovery Tokens to creditors, representing each creditor’s share of the lost or frozen assets. Distribution is expected within 10 business days.
The post Indian Court Blocks WazirX From Using User’s XRP to Cover Hack Losses appeared first on Cryptonews.
Credit: Source link