In a groundbreaking judicial decision, India’s judiciary has formally recognized cryptocurrency as protected property, establishing critical fiduciary safeguards for digital asset holders. The Bombay High Court’s ruling specifically prevents cryptocurrency exchange WazirX from redistributing XRP tokens following a significant security breach that resulted in $234 million in losses.
The court’s determination that cryptocurrencies constitute property under Indian law marks a pivotal moment for the nation’s digital asset regulatory framework. This classification ensures that cryptocurrency holdings receive equivalent legal protections to traditional property assets, fundamentally altering how exchanges must manage user funds during security incidents.
Legal experts highlight that this precedent-setting judgment prohibits WazirX from implementing any dilution mechanism that would spread losses across its user base. Instead, the exchange must bear full responsibility for the security breach while maintaining the integrity of customer holdings. The ruling establishes that cryptocurrency exchanges function as fiduciaries, obligated to protect user assets with the same diligence required of traditional financial custodians.
This decision arrives amid growing regulatory clarity in India’s digital currency landscape and sets important parameters for exchange accountability. Market analysts anticipate this ruling will influence how other jurisdictions approach cryptocurrency property rights and exchange responsibilities following security incidents.
