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**Madras High Court Mandates Bank Guarantee for WazirX User’s XRP Holdings Post-Hack**

The Madras High Court has delivered a landmark ruling affirming cryptocurrencies as possessable property under Indian law, a decision that could significantly impact how digital assets are treated following exchange hacks. This development comes in the wake of a major 2024 cyberattack on WazirX that resulted in a staggering $235 million loss, leaving the platform with insufficient tokens to meet all user liabilities.

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### Significance of the Madras High Court Ruling on WazirX Cryptocurrency Claims

On Saturday, Justice N. Anand Venkatesh ordered WazirX’s operator, Zanmai Labs, to issue a bank guarantee worth approximately $11,800 to secure a specific user’s claim over 3,532 XRP tokens frozen after the hack. This ruling officially recognizes digital assets like XRP as property capable of being owned, possessed, and held in trust.

This important affirmation sets a precedent for handling user claims post-hack, particularly in cases involving frozen assets. It highlights the legal recognition of crypto holdings as trustable property and could influence how exchanges like WazirX manage liabilities, especially amid international restructuring efforts.

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### Impact on WazirX Users Affected by the 2024 Hack

The 2024 cyberattack on WazirX compromised approximately $235 million worth of various cryptocurrencies. As a consequence, the exchange no longer holds enough tokens to cover all pending user claims. Since the incident, many affected users have faced prolonged uncertainty due to frozen assets intended to prevent further loss.

Justice Venkatesh’s order specifically targets a claimant whose XRP remains in Zanmai Labs’ custody, emphasizing the legal standing of such tokens. This introduces new legal considerations for WazirX, which operates under its Singaporean parent company Zettai Labs but has headquarters in India.

The ruling could complicate enforcement efforts within India and potentially conflict with Zettai’s court-approved restructuring plan under Singapore law dated October 13, 2024. According to legal experts cited by Bloomberg and Reuters, jurisdictional overlaps often delay dispute resolution in cross-border crypto cases.

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### Broader Legal and Operational Implications

– **Local Enforcement:** Indian WazirX users may need to pursue local arbitration or court claims to access remedies, rather than relying solely on the Singaporean restructuring scheme.

– **Bank Guarantee as Interim Security:** The bank guarantee ordered by the court acts as a financial safeguard, ensuring the claimant’s rights are protected during ongoing proceedings.

– **WazirX’s Response:** Following the ruling, WazirX has reiterated its commitment to fair distribution and has resumed trading after a year-long halt. The court documents note that the hack severely depleted liquid tokens, prompting Zettai Labs to develop a structured repayment plan under Singapore Companies Act supervision.

– **Regulatory Impact:** With over 100 million crypto users in India as reported by the Reserve Bank of India and industry analyses like PwC, this ruling underscores the need for regulatory clarity. It enforces the view that exchanges must treat user assets as fiduciary obligations, aligned with global standards such as those from the Financial Action Task Force (FATF).

Fintech lawyer Aarav Gupta observes that WazirX’s recent zero-fee trading initiative aims to rebuild user trust, although full recovery remains uncertain. The case exemplifies evolving legal landscapes in India as courts adapt existing laws to accommodate blockchain assets.

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### Frequently Asked Questions

**What does the Madras High Court ruling mean for claiming frozen XRP on WazirX after the hack?**
The ruling allows Indian users to pursue arbitration for frozen XRP holdings, legally recognizing them as trust-held property. Zanmai Labs must provide a bank guarantee of roughly $11,800 for 3,532 XRP tokens, securing claims during legal proceedings. This facilitates quicker resolution for affected users within India.

**How will WazirX’s Singapore restructuring plan interact with Indian court decisions on crypto hacks?**
While WazirX’s parent company, Zettai Labs, received approval for its restructuring plan in Singapore, Indian court orders such as this may require local compliance measures like bank guarantees. As a result, the interaction of jurisdictional frameworks could lead to hybrid solutions overseen by both Indian and Singaporean courts.

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### Key Takeaways

– **Cryptocurrency as Legal Property:** The Madras High Court has formally recognized digital assets like XRP as possessable and held in trust, bolstering user rights in hack cases.

– **Bank Guarantee Requirement:** Zanmai Labs must secure claims with financial guarantees to prevent further delays in recovery.

– **Impact on Restructuring Efforts:** Indian court decisions may extend the timeline or alter the enforcement of WazirX’s Singapore-approved repayment scheme. Users should stay informed and file claims promptly.

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### Conclusion

The Madras High Court’s ruling on WazirX marks a pivotal advancement in the recognition of cryptocurrency under Indian law. By affirming digital assets as trustable property and mandating bank guarantees to secure user claims, the court has set a precedent that could influence how crypto exchanges and users navigate the complex aftermath of hacks.

As WazirX works through its international restructuring, affected users—particularly those in India—may experience changes in how claims are addressed, with greater emphasis on legal protections and fiduciary responsibilities. This case highlights the growing need for clear regulatory frameworks in the expanding Indian crypto market and signals a maturing judicial approach to blockchain-related disputes.

Stay tuned for more updates on cryptocurrency regulations and WazirX’s ongoing developments.

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**Madras High Court Confirms Cryptocurrencies Can Be Owned and Held in Trust**

In a landmark ruling that could reshape the future of cryptocurrency in India, the Madras High Court has declared that cryptocurrencies qualify as property under Indian law. Delivered by Justice N. Anand Venkatesh, the decision affirms that cryptocurrencies can be owned, held in trust, and protected as legal property — a major step in clarifying the legal status of digital assets in the country.

### Cryptocurrency in India Now Recognised as Property

The case originated from a petition by an investor whose 3,532.30 XRP coins were frozen following a cyberattack on WazirX, one of India’s largest cryptocurrency exchanges. In July 2024, WazirX suffered a $234 million hack involving Ethereum and ERC-20 tokens. Although the investor’s XRP holdings were not part of the stolen assets, WazirX sought to redistribute all users’ funds under its so-called “socialisation of losses” plan.

Justice Venkatesh firmly rejected this proposal, ruling that each investor’s digital holdings are individual property and cannot be diluted or redistributed to cover exchange losses. He emphasised that cryptocurrencies, while intangible, possess all the essential attributes of property: they are identifiable, transferable, and exclusively controlled through private keys.

> “It is not a tangible property nor is it a currency,” the judge observed. “However, it is a property, which is capable of being enjoyed and possessed in a beneficial form.”

This interpretation grants digital asset holders stronger legal standing, ensuring that their cryptocurrencies are recognised as assets protected under Indian law.

### Jurisdiction and Investor Protection

The Court also settled important questions regarding jurisdiction, dismissing WazirX’s argument that Singaporean arbitration rules applied due to its parent company, Zettai Pte Ltd, being based in Singapore.

Justice Venkatesh cited the Supreme Court’s earlier decision in *PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd* (2021), noting that Indian courts have authority over assets located within India. Because the investor’s transactions originated from Chennai and involved an Indian bank account, the Court confirmed the case fell squarely under Indian jurisdiction.

The Court further highlighted that Zanmai Labs Pvt Ltd, which operates WazirX in India, is registered with the Financial Intelligence Unit (FIU), unlike its foreign parent company or Binance. This distinction reinforces that Indian exchanges operating domestically are subject to Indian oversight and accountability—particularly in protecting user assets and maintaining transparent custodial practices.

### Strengthening Web3 Governance

Justice Venkatesh’s ruling went beyond individual relief, calling for higher standards of corporate governance within the Web3 and cryptocurrency sectors. He urged exchanges to:

– Maintain separate client funds
– Conduct independent audits
– Uphold robust KYC and anti-money laundering controls

The Court noted these measures are vital for building trust in the digital economy and protecting consumers from future mishandling of assets.

Legal experts have hailed the judgment as a milestone in developing “crypto-jurisprudence” in India. Vikram Subburaj, CEO of Indian exchange Giottus, described it as a foundational moment that signals to all market participants — exchanges, users, and regulators — that the digital asset space will be held to strong standards of governance and protection.

### A Foundation for India’s Crypto Future

The Court’s ruling not only protects the rights of individual investors but also strengthens the broader regulatory framework surrounding digital assets. By recognising cryptocurrency as property, the judgment fills a crucial legal gap in a country where tax enforcement on crypto remains strict, but investor protections have lagged.

As Justice Venkatesh wrote, courts now serve as the “central stage where the future of digital value is debated.” Through this ruling, the Madras High Court has provided India with a clearer understanding of ownership, responsibility, and trust in the age of decentralisation.

With cryptocurrency in India now firmly recognised as property under Indian law, this decision marks a turning point for the country’s digital asset ecosystem—affirming that crypto holdings are not merely speculative instruments but protected assets under the law.
https://coinjournal.net/news/cryptocurrency-is-as-property-under-indian-law-rules-madras-high-court/

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Indian Court XRP Ruling May Complicate WazirX Hack Claims Process

Cryptocurrency is as ‘property’ under Indian law, rules Madras High Court