Key Points
- •Indian court declares XRP as property in WazirX case.
- •Impacts exchange holdings and user rights in India.
- •Sets precedent for crypto property rights under Indian law.
The Madras High Court has ruled that XRP held on the WazirX cryptocurrency exchange is the property of the user, not the exchange itself. This landmark decision significantly impacts the rights of crypto asset holders and the operational framework for exchanges within India, setting a legal precedent for cryptocurrency ownership.
The court's decision in favor of cryptocurrency as recognized property reshapes legal perspectives and operational policies for exchanges in India, signaling a shift in how digital assets are viewed under the law. This ruling is expected to influence future exchange-user relationships across Indian crypto platforms.
The Madras High Court's Decision
The Madras High Court ruled that XRP held on WazirX is the user's property, not the exchange’s. This case specifically involved Rhutikumari, a user whose XRP was frozen following a hack. She challenged WazirX's subsequent asset restructuring plans.
In its order, the court directed Zanmai Labs, the operator of WazirX, to provide a bank guarantee equivalent to 9.56 lakh INR to cover Rhutikumari's frozen XRP. Justice N. Anand Venkatesh, presiding over the case, emphasized the legal recognition of cryptocurrency as property. Justice N. Anand Venkatesh stated:
Cryptocurrency is a property… capable of being enjoyed and possessed, and capable of being held in trust.
Immediate Legal Implications
The immediate effects of this ruling include a significant shift in legal perspectives on cryptocurrency ownership in India. The decision directly impacts user rights and is expected to influence the operational policies of cryptocurrency exchanges throughout the country.
This ruling underscores the financial implications for exchanges, which may now need to reassess their asset ownership policies. The relationship between exchanges and their users is likely to undergo changes as the Indian judicial system explicitly recognizes cryptocurrencies like XRP as legally defined property.
Community and Future Impact
The sentiment within the cryptocurrency community generally supports the ruling, highlighting the ongoing need for clearer laws and protections for crypto assets. This decision has the potential to influence future legal disputes involving cryptocurrency exchanges.
Industry insights suggest that regulatory frameworks in India may evolve in response to this judgment. Exchanges are likely to be prompted to adopt more transparent operational guidelines. While other jurisdictions have treated crypto as property, this ruling represents a significant legal first within India.