India Court Rules XRP as Property, Boosting Crypto Rights

The legal battle began when Rhutikumari, an XRP holder, filed a petition against cryptocurrency exchange WazirX after the platform froze her account containing 3,532.30 XRP worth approximately $9,400. The dispute originated from WazirX’s response to a July 2024 hack that resulted in the theft of about $235 million in user assets. Facing massive losses, the exchange proposed a controversial ‘socialization of losses’ plan that would distribute the financial impact proportionally across all user accounts, regardless of whether individual accounts were directly affected by the security breach.

Rhutikumari challenged WazirX’s proposed solution, arguing that it fundamentally infringed on her ownership rights. Her legal team contended that the exchange could not unilaterally decide to spread losses across all users without explicit consent, particularly when her specific XRP holdings remained intact and unaffected by the hack. The case brought into sharp focus the tension between exchange operational policies and individual property rights in the rapidly evolving digital asset landscape.

The court’s ruling represents a watershed moment for cryptocurrency regulation in India, explicitly granting XRP property status under Indian law. This classification provides digital asset holders with strengthened legal protections and establishes clear ownership rights that were previously ambiguous in the Indian regulatory framework. By recognizing XRP as property, the court has extended traditional property law principles to the digital asset space, creating a precedent that could apply to other cryptocurrencies.

The judgment specifically invalidated WazirX’s ‘socialization of losses’ approach, ruling that exchanges cannot distribute hack-related financial impacts across user accounts without individual consent. The court emphasized that such actions constitute an infringement on individual property rights, particularly when users’ specific assets remain secure and unaffected by security breaches. This aspect of the ruling establishes crucial boundaries for exchange authority and user protection in the event of platform vulnerabilities or security failures.

For Rhutikumari, the ruling meant immediate relief—her frozen account containing 3,532.30 XRP was ordered to be restored, affirming her exclusive ownership rights over the digital assets. The decision sends a clear message to cryptocurrency exchanges operating in India that user assets cannot be treated as communal property to absorb collective losses without proper legal authority and individual consent.

This landmark ruling arrives at a critical juncture for India’s cryptocurrency market, providing much-needed legal clarity on digital asset ownership. The classification of XRP as property establishes a foundation for future regulatory frameworks and could influence how other digital assets are treated under Indian law. The decision potentially sets a precedent that extends beyond XRP to encompass a wide range of cryptocurrencies, offering investors greater confidence in their property rights.

The judgment also establishes new accountability standards for cryptocurrency exchanges operating in India. By limiting exchanges’ ability to implement collective loss-sharing mechanisms without consent, the ruling forces platforms to strengthen their security protocols and risk management practices. This could lead to improved industry standards and better protection for Indian investors who have increasingly embraced digital assets despite regulatory uncertainty.

For the broader Indian crypto community, the ruling represents a significant victory for individual rights against corporate authority. It demonstrates that traditional legal principles of property ownership can be successfully applied to digital assets, providing a framework for resolving future disputes between exchanges and users. The decision may also influence ongoing regulatory discussions about cryptocurrency classification and investor protection in India’s rapidly maturing digital asset market.