Judicial Ruling Details
The Madras High Court issued an interim order on October 25, 2025, preventing WazirX’s Indian operator, Zanmai Labs, from redistributing a user’s 3,532 XRP as part of a recovery token scheme approved by the Singapore High Court. Justice N. Anand Venkatesh recognized cryptocurrency holdings as property capable of being held in trust, a decision that may influence legal treatment of digital assets in India.
Background and Context
WazirX halted withdrawals following a $230 million hack in July 2024. The Singapore-led restructuring plan proposed issuance of recovery tokens to affected users, redistributing retrievable assets pro rata. The petitioner, a long-time WazirX user, challenged the exchange’s authority to reallocate her XRP under the exchange’s terms of service and foreign court orders.
Legal Precedent
By classifying cryptocurrency as trust property, the Madras High Court diverged from traditional views that treat digital assets as contractual or custodial balances. The ruling may establish a precedent for user-centric protections, reinforcing the principle that digital assets remain the property of the end user despite exchange-driven restructuring efforts.
Implications for Exchanges
Indian exchanges operating under foreign parentage may face increased domestic litigation risk. Users may seek local relief against any restructuring perceived as detracting from their holdings. Exchanges will likely enhance transparency and user communication to mitigate similar legal challenges in the future.
Next Steps
The court ordered Zanmai Labs to furnish a bank guarantee equivalent to the petitioner’s frozen XRP value, estimated at 9.56 lakh rupees (approximately $11,500). A full hearing is scheduled in November. Stakeholders across the crypto ecosystem, including regulatory bodies and legal experts, will monitor the case for broader ramifications on digital asset jurisprudence in India.
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