Indian Court Blocks WazirX From Using Users’ XRP for Losses
An Indian court has barred WazirX from reallocating users' XRP assets following a breach. The Madras High Court declared cryptocurrencies as property, highlighting that the customer's XRP and those stolen are separate digital assets.
Key Points from the Madras High Court Ruling
- On October 25, the court prohibited WazirX from redistributing 3,532 XRP holdings worth approximately $9,400.
- The court provided "interim protection" to the user, emphasizing that losses from a $230 million exploit in July 2024 should not be absorbed by XRP holders.
- Judge Venkatesh stated that the restructuring plan's "socialization of losses" shouldn't affect those without ERC-20 tokens, as they are different cryptocurrencies.
Property Rights and Digital Assets
- The court affirmed that digital assets are considered property, protected by fundamental property rights.
- XRP holders' assets should remain theirs and not be used for WazirX's operational losses.
- The user is entitled to interim protection under India's Arbitration and Conciliation Act.
Meanwhile, WazirX resumed operations on October 24, introducing zero trading fees for at least 30 days to regain user confidence. The platform aims to restore full functionality by October 27.