XRP Ruling: India Treats XRP as Property

What to Know:

• Indian court recognizes crypto as property, preventing WazirX from reallocating XRP holdings.
• The ruling aligns India with other jurisdictions prioritizing crypto property rights during exchange insolvency.
• This decision could reshape how exchanges handle user assets and jurisdictional claims.

The Madras High Court has made a landmark ruling, declaring cryptocurrency as property under Indian law, specifically in a case involving XRP. This decision prevents WazirX from reallocating a customer’s XRP holdings and establishes a precedent with potential implications for how exchanges manage user assets during insolvency proceedings. The ruling underscores the evolving legal landscape surrounding digital assets and their treatment as property.

The court’s decision cited Section 2(47A) of the Income Tax Act, which governs virtual digital assets, emphasizing that cryptocurrency is capable of being enjoyed, possessed, and held in trust. This perspective contrasts with WazirX’s argument that user compensation would be managed through a Singapore High Court-supervised restructuring scheme following a security breach. The court asserted jurisdiction, highlighting that the user initiated transactions and accessed the platform from within India.

Courts in the US and UK also treat crypto as property, issuing restraining orders, freezing wallets, and recognizing proprietary injunctions against exchanges. These actions reflect a growing international consensus on the legal status of crypto assets. However, the extent of relief available to users often depends on the contractual structure between the user and the exchange.

This ruling places India alongside other jurisdictions that prioritize property rights over pooling schemes when exchanges face financial difficulties. By recognizing crypto holdings as distinct property rights, the decision could limit how platforms redistribute user holdings during financial distress. This also clarifies that local courts retain jurisdiction over assets accessed and funded domestically, regardless of where corporate restructuring proceedings occur.

This landmark ruling reinforces the importance of regulatory clarity in the crypto space, particularly as it relates to user protection and asset ownership. As digital asset adoption grows, such legal precedents will play a crucial role in shaping the future of crypto regulations and investment strategies. This decision may also encourage further discussions on the need for comprehensive legal frameworks that address the unique challenges and opportunities presented by cryptocurrencies.

Related: XRP Price: $12M Max Pain for Bears

Source: Original article