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Court Rules Crypto as Property, Blocking WazirX from Diluting User Assets

Court Rules Crypto as Property, Blocking WazirX from Diluting User Assets

Madras High Court’s decision bars WazirX from redistributing hacked XRP funds, affirming stronger legal protection for cryptocurrency holders under Indian constitutional property law.

XRP

Summary

The Madras High Court has ruled that cryptocurrencies are legally recognized as property under India’s constitution, strengthening protections for digital asset holders. The court barred WazirX from redistributing a customer’s XRP holdings under its 'socialisation of losses' policy following the platform’s $234 million hack in 2024. The judgment affirms exchanges hold assets in trust for users and cannot dilute individual ownership to cover operational losses.

Terms & Concepts
  • Crypto as Property: A legal classification designating cryptocurrency as an asset with ownership rights and protections under property law.
  • Loss Socialization: Practice where an exchange distributes losses from an incident among its users, typically by deducting from their holdings.
  • XRP: A digital asset and cryptocurrency used by Ripple Labs for fast and cost-efficient cross-border transactions.