India's Madras High Court has delivered a landmark ruling, affirming that cryptocurrencies qualify as property under Indian law and blocking WazirX from redistributing a user's
holdings to offset losses from a $234 million hack in July 2024. The decision, which marks one of the country's clearest legal acknowledgments of digital asset ownership, establishes that crypto assets are protected under property law and must be treated as client property held in trust by exchanges, according to .
The court's judgment, delivered by Justice N. Anand Venkatesh, explicitly rejected WazirX's plan to "socialize losses" among users following the breach, which drained nearly half of the exchange's $500 million in assets. The ruling emphasized that the user's 3,532 XRP tokens-purchased in January 2024 and unaffected by the hack-could not be diluted under the exchange's restructuring plan. "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," as reported by
.The decision has significant implications for India's crypto ecosystem. By classifying crypto as property, the court extended traditional property law protections to digital assets, strengthening consumer rights and setting a foundation for clearer regulatory frameworks. Sudhakar Lakshmanaraja, founder of Digital South Trust, called the ruling "very helpful," noting it paves the way for stronger fiduciary standards in the industry, the Yahoo Finance report noted. The judgment also reinforced Indian courts' jurisdiction over domestic crypto transactions, even when exchanges operate internationally. The investor in question had purchased XRP using an Indian bank account, establishing a clear nexus to the country, according to
.WazirX, India's largest crypto exchange, has been navigating a complex restructuring process since the hack, which was attributed to North Korean-linked hackers. The Singapore High Court approved a restructuring plan in October 2025, requiring creditors to share losses. However, the Madras High Court's intervention highlighted the limitations of such international agreements when they conflict with domestic user rights. The court dismissed WazirX's argument that the Singapore restructuring automatically binds Indian users, ruling that the "socialization of losses" scheme lacked contractual basis, Decrypt reported.
The ruling arrives as WazirX resumes operations after a 16-month suspension. The exchange began a phased reopening on October 24, allowing users to deposit and trade but keeping withdrawals paused. CEO Nischal Shetty has emphasized the need to rebuild trust, with the new app interface displaying rebalanced asset values that reflect 60–70% increases for users, according to
. However, some users report delays in accessing funds, with only 30% of expected recoveries processed as of October 27, Decrypt reported.The Madras High Court's decision aligns with broader judicial trends in India, where courts have increasingly recognized crypto's economic value. The Bombay High Court previously rejected similar loss-sharing measures by another exchange, Bitcipher Labs, while the Madras High Court referenced precedents like the Supreme Court's PASL Wind Solutions ruling to affirm its jurisdiction, Coinotag noted. Legal experts note that the judgment could influence future regulations, particularly as India's government has yet to pass comprehensive crypto legislation.
For now, the ruling underscores the growing role of courts in shaping India's crypto landscape. Vikram Subburaj, CEO of Giottus, called the decision "foundational crypto-jurisprudence," signaling that the high-tech sector will face higher governance standards, the Yahoo Finance report added. As exchanges like WazirX navigate post-hack recovery, the Madras High Court's affirmation of crypto as property offers both a warning and an opportunity: platforms must treat user assets with the same rigor as traditional financial institutions.
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