As The Times of India reported on Oct. 25, Justice N Anand Venkatesh ruled that the entity operating WazirX cannot redistribute, apportion, or reallocate 3,532.30 XRP coins belonging to Rhutikumari, who purchased the assets by transferring funds from her Chennai bank account.
The court granted an interim injunction after finding jurisdiction, despite WazirX’s argument that a Singapore High Court-supervised restructuring scheme controlled the matter.
Justice Venkatesh stated:
“Cryptocurrency is treated as a virtual digital asset, and it is not treated as a speculative transaction.”
The ruling cited Section 2(47A) of the Income Tax Act, which governs virtual digital assets, and found that cryptocurrency “is capable of being enjoyed and possessed (in a beneficial form) and is capable of being held in trust.”
WazirX contended that the platform does not own crypto wallets and that all users would receive pro rata compensation through a three-step process supervised by Singapore’s high court following a hack that halted withdrawals.
The exchange argued that the Madras High Court lacked jurisdiction because the arbitration was seated in Singapore.
The court rejected that position. Justice Venkatesh noted that Rhutikumari transferred funds from India, accessed the platform from within the country, and therefore established that part of the cause of action arose within the Madras High Court’s territorial jurisdiction.
The decision treats crypto holdings as distinct property rights rather than unsecured claims in a bankruptcy pool.
Courts in the US routinely treat crypto as property for remedial purposes, though regulatory classifications vary by agency.
English courts recognize crypto as property and grant proprietary injunctions, freezing orders, and Bankers Trust disclosure against exchanges, including those overseas.
LMN v Bitflyer confirmed disclosure orders can reach foreign exchanges. Parliament moved to codify digital-asset property concepts following the Law Commission’s 2023 report, solidifying the legal foundation for such orders.
Quoine v B2C2 was the first to flag trust issues in exchange settings. Subsequent cases refined the property analysis to support stronger customer protections.
The Madras ruling aligns India with jurisdictions that prioritize property rights over pooling schemes in cases where exchanges face insolvency or restructuring.
By establishing that crypto purchases create enforceable property interests rather than mere contractual claims, the decision may limit how platforms redistribute user holdings during financial distress and clarify that local courts retain jurisdiction over assets accessed and funded domestically, regardless of where corporate restructuring proceedings occur.
