An Indian court has blocked WazirX from redistributing a userโs XRP, deciding cryptocurrency must be held in trust, following a hack in July 2024.
This ruling underscores cryptocurrencyโs recognition as property, setting a precedent for investor protection and challenging cross-border restructuring plans in India.
An Indian court has taken action against WazirXโs plan to redistribute a userโs XRP holdings following a 2024 hack. This ruling establishes cryptocurrency as property that should be held in trust for users.
Indian Court Rules XRP as Trust Property After Hack
Rhutikumari, a WazirX user, petitioned the court to challenge the redistribution of her 3,532 XRP tokens. Justice N. Anand Venkatesh ruled in favor of the user, affecting Zanmai Labsโ approach to managing the aftermath of the hack. Justice Venkatesh noted, โCryptocurrency is a propertyโฆ capable of being enjoyed and possessed, and capable of being held in trust.โ
Financial Constraints for WazirX Amid Court-Ordered Bank Guarantee
The ruling impacts WazirXโs restructuring plans and highlights the need to treat digital assets as property. Users have experienced frustration with payout delays and partial withdraws, reflecting widespread dissatisfaction with the companyโs handling of the hack.
Financially, WazirX must provide a bank guarantee equivalent to the XRP value while grappling with recovery challenges from the hackโs $230โ$234 million losses. The decision indicates a shift in judicial perspective on cryptocurrency ownership and user protections in India.
Precedent Set for Cryptocurrency Property and Trust in India
This case is compared to the Mt. Gox bankruptcy, where frozen assets led to prolonged legal battles. It marks a significant first in India, framing digital currency as property with trust protections, setting a precedent for future legal disputes.
Kanalcoin experts suggest this ruling could signal greater regulatory scrutiny and user protection. The courtโs decision may encourage other jurisdictions to consider similar asset protection measures, potentially influencing global cryptocurrency exchange practices.
| Disclaimer: This website provides information only and is not financial advice. Cryptocurrency investments are risky. We do not guarantee accuracy and are not liable for losses. Conduct your own research before investing. |