Legal Recognition of XRP as Property in India Post-WazirX Hack: Navigating Regulatory Risk and Jurisdictional Advantage

India's cryptocurrency landscape has long been a battleground of regulatory caution and technological ambition. The WazirX hack of July 2024-whereover $200 million in digital assets were stolen-accelerated a critical legal reckoning. In October 2025, the Madras High Court delivered a landmark ruling, classifying cryptocurrency as "property" under Indian law, a decision with profound implications for XRP holders and the broader crypto ecosystem. This analysis unpacks the regulatory risks and jurisdictional advantages emerging from this shift, focusing on how XRP's legal status reshapes investment dynamics in a market teetering between innovation and oversight.

The Regulatory Tightrope: RBI Caution vs. Market Demand

India's approach to crypto has been defined by contradiction. The Reserve Bank of India (RBI) has historically viewed digital assets as threats to monetary sovereignty, imposing a four-year ban on bank-crypto transactions until the Supreme Court overturned it in 2020, according to XRP regulations in India. Yet, the government's 2022 tax framework-levying a 30% tax on crypto gains and a 1% Tax Deducted at Source (TDS)-effectively recognized virtual digital assets (VDAs) like XRP as taxable property, as noted in the same report. This tax-based acknowledgment, however, does not equate to formal legalization.

The RBI's ambivalence persists. While it has explored blockchain for cross-border payments, its Digital Rupee initiative remains the preferred vehicle for financial inclusion, the report adds. XRP, with its low-cost transaction model, could theoretically complement these goals, but Ripple's On-Demand Liquidity (ODL) solution faces an uphill battle against regulatory inertia. The central bank's focus remains on controlled experimentation, not open adoption.

The Madras High Court Ruling: A Legal Milestone

The Madras High Court's October 2025 decision, as reported by the Financial Express, marked a turning point. In a case involving 3,532.30 XRP coins frozen during the WazirX hack, Justice N Anand Venkatesh affirmed that cryptocurrency possesses the "identifiability, transferability, and control" inherent to property. This ruling, while narrow in scope, establishes a precedent: crypto assets are now legally protected under India's property laws, even if their status as currency remains unresolved.

The court's emphasis on private key control as a determinant of ownership is particularly significant. It aligns with global trends where jurisdictions like the U.S. and EU increasingly treat crypto as property for inheritance and estate purposes. For XRP holders, this means greater legal recourse in disputes, though the ruling does not absolve them of compliance obligations under KYC/AML norms, as discussed in earlier regulatory analyses.

Regulatory Risk: The Unwritten Crypto Bill

India's proposed comprehensive crypto bill, expected in 2026, could either clarify or complicate this landscape. Current drafts suggest a risk-based framework, potentially distinguishing utility tokens (like XRP) from speculative assets, according to prior regulatory commentary. However, the bill's ambiguity-particularly around definitions of "utility" versus "investment"-leaves room for regulatory overreach.

The Madras ruling may act as a counterweight. By anchoring crypto to property law, it creates a legal baseline that regulators cannot easily erase. Yet, investors must remain wary: the Supreme Court's rejection of WazirX hack victims' petitions in 2025, documented in the Supreme Court rejection, highlighted the lack of clear jurisdiction in crypto disputes. The Madras court's assertion of authority over digital assets could limit such jurisdictional gray areas, but only if lower courts follow suit.

Jurisdictional Advantage: Why India Matters

For global investors, India's evolving stance on XRP presents a dual-edged sword. On one hand, the 30% tax rate and strict TDS requirements make it a high-cost market. On the other, the Madras ruling and Ripple's engagement with Indian banks signal growing institutional acceptance.

The jurisdictional advantage lies in India's demographic and infrastructural potential. With over 200 million crypto users projected by 2030, the country represents a critical market for XRP's cross-border use cases. Ripple's ODL solution, already adopted by 12 Indian financial institutions, could gain traction if the crypto bill prioritizes utility tokens.

Investment Implications: Balancing Risk and Reward

From an investment perspective, XRP's legal recognition in India introduces both opportunities and hazards. The Madras ruling reduces the risk of total asset forfeiture in disputes, enhancing XRP's appeal to institutional investors. However, the absence of a clear regulatory framework means sudden policy shifts-such as a renewed RBI ban or stricter tax enforcement-remain plausible.

Global investors should also consider spillover effects. India's legal precedents often influence neighboring markets in Southeast Asia, where XRP adoption is rising. A favorable crypto bill could catalyze regional adoption, while regulatory crackdowns might trigger a flight to more crypto-friendly jurisdictions like Singapore or Dubai.

Conclusion: A Precarious Equilibrium

India's treatment of XRP as property marks a step toward mainstream acceptance, but the path forward remains fraught. The Madras ruling provides a legal scaffold, yet the RBI's cautious approach and the pending crypto bill ensure that regulatory risk remains high. For XRP, the jurisdictional advantage lies in India's strategic position as a bridge between traditional finance and blockchain innovation. Investors must navigate this terrain with vigilance, balancing the promise of cross-border utility against the volatility of regulatory outcomes.