The Madras High Court has delivered a landmark ruling for India’s crypto sector, declaring that cryptocurrencies qualify as property under Indian constitutional law. The decision came as part of a case involving WazirX, India’s largest crypto exchange, following its $234 million hack in 2024.
WazirX Barred from Redistributing User’s XRP
At the heart of the case was a user who held 3,532 XRP tokens funds that were unaffected by the 2024 hack but were still set to be diluted under WazirX’s controversial “socialisation of losses” plan.
The plan, part of WazirX’s Singapore-based restructuring, aimed to spread the exchange’s losses from the hack across all users, even those whose holdings were not compromised.
However, the High Court rejected that approach. Justice N. Anand Venkatesh ruled that the Indian-operated platform (Zanmai Labs Pvt Ltd) falls under domestic jurisdiction, and that unaffected users cannot be forced to absorb losses incurred by others.
He further ordered Zanmai Labs to furnish a bank guarantee equivalent to the value of the frozen XRP while the case is being resolved, ensuring the user’s assets remain protected.
Crypto Recognized as Property Under Indian Law
In a pivotal statement, the court ruled that digital assets like cryptocurrencies are “property” under Indian constitutional law and can be held in trust effectively affirming legal ownership rights for crypto holders within the country.
This sets a powerful precedent for India’s still-evolving crypto landscape, which has long operated in a legal grey area. While the government imposes a 30% capital gains tax and 1% TDS on crypto transactions, no comprehensive regulation currently defines investor rights or exchange accountability.
Implications for India’s Crypto Regulation
The decision underscores the growing tension between India’s push for crypto taxation and the absence of clear ownership protections. By explicitly classifying cryptocurrencies as property, the court has strengthened investor protections and laid groundwork for future regulation.
Legal experts say the ruling could help shape new frameworks around custody, fiduciary duty, and exchange governance, ensuring that platforms operating in India cannot unilaterally impose overseas restructuring decisions on domestic users.
A Turning Point for Indian Crypto Holders
For investors, the judgment offers a rare win in a regulatory landscape often marked by uncertainty. It confirms that crypto holdings accessed or managed within India fall under Indian jurisdiction, even if the parent company is based abroad.
The Madras High Court’s verdict not only blocks WazirX from redistributing unaffected XRP but also sets a powerful legal precedent one that may influence future cases involving digital asset rights, custody, and investor protection in India.
