Ripple’s XRP Banned From Being Used by WazirX to Cover Platform Losses: Here’s Why

An Indian court has blocked crypto exchange WazirX from reallocating a user’s XRP to cover platform ￰0￱ Madras High Court granted “interim protection,” affirming that the user’s digital assets remain their distinct property under Indian ￰1￱ ruling marks a key moment in the country’s evolving crypto ￰2￱ case stems from WazirX’s plan to apply a “socialization of losses” model after a $235 million exploit in July ￰3￱ exchange proposed spreading losses across all users, including those who held cryptocurrencies unrelated to the stolen ERC-20 ￰4￱ Upholds Crypto Ownership Rights Justice ￰5￱ Venkatesh ruled that the loss-sharing approach should not affect the XRP ￰6￱ user’s 3,532 tokens, valued at around $9,400, were acquired long before the ￰7￱ judge held that XRP and ERC-20 assets are separate in nature and cannot be grouped together for recovery ￰8￱ court further clarified that the user’s XRP remains their property and cannot be diluted to offset the exchange’s operational ￰9￱ doing so, it reaffirmed that cryptocurrency qualifies as a form of property capable of being owned and protected under existing ￰10￱ enforce this ruling, the judgment also invoked the Arbitration and Conciliation Act, ensuring the user receives legal safeguards until arbitration proceedings are ￰11￱ must either deposit 956,000 rupees (about $11,500) in escrow or provide a bank guarantee for the same amount as interim ￰12￱ Resumes Amid Key Legal Shifts The Madras High Court decision comes as WazirX seeks to rebuild its operations following the prolonged suspension stemming from the 2024 ￰13￱ platform resumed operations last week after the Singapore High Court approved its restructuring plan, with backing from nearly 95.7% of participating ￰14￱ previously attributed the exploit to North Korea’s Lazarus Group, which exploited a weakness in its multi-signature wallet ￰15￱ hack forced the exchange offline for 16 months, prompting widespread debate about accountability and asset security in India’s crypto ￰16￱ this backdrop, legal observers see the latest ruling as a signal that Indian courts are beginning to recognize digital assets as protected ￰17￱ case follows a Bombay High Court decision rejecting similar loss-sharing measures by Bitcipher Labs.

Notably, these developments could shape future disputes as India moves toward clearer crypto regulations.