TLDR
- The Madras High Court blocked WazirX from redistributing a user’s 3,532 XRP tokens under the exchange’s loss socialization plan following a July 2024 hack that resulted in $230 million in losses.
- The court ruled that cryptocurrency qualifies as property capable of being held in trust, establishing that crypto assets belong to users and not the exchange.
- Justice N. Anand Venkatesh ordered WazirX’s Indian operator Zanmai Labs to provide a bank guarantee worth approximately $11,500, equivalent to the frozen XRP holdings.
- The ruling gives Indian users legal protection even when the exchange’s restructuring is happening under Singapore jurisdiction, where parent company Zettai Pte Ltd is based.
- WazirX restarted operations on October 25, 2025, with 95.7% creditor approval, though users report receiving only 30% of expected funds with verification delays.
The Madras High Court has stopped WazirX from redistributing a customer’s XRP holdings as part of the exchange’s restructuring plan. The decision came after the platform suffered a $230 million hack in July 2024.
🚨 JUST IN: Madras High Court sides with an $XRP holder in the WazirX hack case — declaring $XRP as property under Indian law. 🇮🇳 pic.twitter.com/1RdDztqcTU
— RippleXity (@RippleXity) October 26, 2025
Justice N. Anand Venkatesh issued an order on October 25 directing Zanmai Labs, WazirX’s Indian operator, to provide a bank guarantee worth roughly $11,500. This amount equals the value of 3,532 XRP tokens belonging to petitioner Rhutikumari that were frozen after the hack.
The court stated that cryptocurrency is property capable of being enjoyed, possessed, and held in trust. This marks one of India’s clearest legal acknowledgments of digital asset ownership.
Rhutikumari, a long-time WazirX user, challenged the exchange’s right to redistribute her XRP under a “socialized loss scheme.” The plan was tied to restructuring by Singapore-based parent company Zettai Pte Ltd.
WazirX halted withdrawals in July 2024 after hackers targeted wallets managed by Singapore custodian Liminal. The exchange then pursued court-supervised restructuring in Singapore where users would receive recovery tokens and partial repayments.
The Singapore High Court approved this plan earlier in October. It has become the foundation of WazirX’s relaunch.
Indian Court Jurisdiction Over Foreign Restructuring
Justice Venkatesh rejected WazirX’s argument that its Singapore court-approved restructuring automatically binds Indian users. The judge noted that Rhutikumari used the WazirX platform through her mobile phone from her residence in India.
The court found she was prevented from trading or liquidating her holdings. This established that crypto assets accessed within India fall under Indian court protection.
The judge compared the loss socialization plan to “a group insurance of a self-help group.” He ruled it unenforceable against Indian users because it was not part of the contractual framework between the parties.
Justice Venkatesh emphasized that the cryptocurrency was held by the user in India through the WazirX platform. The ruling establishes that assets held in custody by exchanges must be treated as client property held in trust.
Crypto Property Rights in India
The decision provides legal standing to crypto assets as property capable of ownership and protection under Indian law. Sudhakar Lakshmanaraja, founder of Digital South Trust, said the clarity strengthens consumer protection for crypto holders.
He noted it affirms their rights as asset owners. The ruling paves the way for clearer regulatory and fiduciary frameworks in India’s crypto ecosystem.
Vikram Subburaj, CEO of Indian crypto exchange Giottus, called the judgment foundational crypto-jurisprudence. He said these decisions signal that the high-tech arena will be held to high standards of governance and protection.
The case follows a similar Bombay High Court decision rejecting loss-sharing measures by Bitcipher Labs. Indian courts are increasingly defining user protections while the government moves slowly on regulation.
India’s crypto policy remains focused on tax collection with a 30% levy and 1% tax deducted at source. Rules on investor rights and asset ownership remain undefined.
WazirX restarted operations on the same day as the court ruling with 95.7% creditor approval. Users have reported receiving only 30% of expected funds while facing locked accounts and customer verification delays.
