XRP News Today: Indian Court Recognizes Crypto as Legal Property, Halts WazirX's XRP Redistribution

Indian courts have intervened to halt WazirX's attempt to reallocate XRP tokens from a user affected by the 2024 hack, marking a pivotal moment in India's evolving crypto legal landscape. In a ruling delivered by Justice N. Anand Venkatesh of the Madras High Court, the exchange was ordered to provide a bank guarantee of approximately $11,800 to secure the user's 3,532 XRP holdings, pending arbitration, according to Cointelegraph. The court affirmed that cryptocurrency is a form of property "capable of being enjoyed and possessed" and must be held in trust for users, rejecting WazirX's "socialized loss" restructuring plan, as reported by Live Bitcoin News. This decision not only protects the individual user but also sets a precedent for treating crypto assets as legal property, potentially reshaping how exchanges handle user claims in India.

The ruling comes amid WazirX's phased relaunch after a 16-month suspension following a $235 million cyberattack in July 2024, according to Yahoo Finance. The Singapore High Court had previously approved a restructuring plan, allowing the exchange to resume operations with a zero-fee trading model to rebuild trust, as described in an Economic Times report. Under this plan, users were to receive "Recovery Tokens" representing claims on recovered assets, with 85% of balances to be returned by July 2025. However, the Indian court's intervention underscores jurisdictional complexities: while WazirX's parent company, Zettai, operates under Singaporean law, the Madras High Court asserted authority over the XRP in question, noting the assets were acquired in India, a point highlighted by Live Bitcoin News. The court dismissed WazirX's argument that the matter fell under Singapore's jurisdiction, emphasizing that user agreements lacked enforceable clauses for loss-sharing, as also noted by Live Bitcoin News.

The case originated from a Chennai-based user, Rhutikumari, who challenged WazirX's right to redistribute her XRP holdings, arguing the tokens were unrelated to the hacked assets, according to Live Bitcoin News. The court's interim order prevents WazirX from liquidating her XRP, valued at roughly $9,400, until arbitration concludes, as reported by Live Bitcoin News. This outcome aligns with broader concerns about crypto custody and user rights, as exchanges increasingly face scrutiny over how they manage assets post-hack. The Madras High Court's recognition of crypto as property also aligns with global trends, such as the U.S. SEC's recent enforcement actions, but it introduces a unique legal framework in India, where crypto regulations remain nascent, noted by CoinDesk.

WazirX's relaunch has been met with mixed reactions. While the exchange reported a 60–70% increase in user asset values post-restructuring, per Yahoo Finance, many remain frustrated by ongoing withdrawal restrictions and liquidity concerns. The Indian court's decision may further complicate the exchange's recovery plan, as it now navigates dual legal frameworks in Singapore and India. Analysts suggest the ruling could embolden other users to challenge WazirX's restructuring terms, potentially delaying full operations, a consequence discussed in the CoinDesk piece.