India Declares XRP as Property, Not Speculation, Setting Precedent

The Madras High Court has issued a landmark ruling, declaring cryptocurrency as property under Indian law and preventing WazirX from reallocating a customer’s XRP holdings. Justice N Anand Venkatesh explicitly stated that 3,532.30 XRP belonging to Rhutikumari qualifies as a “virtual digital asset” and not a speculative transaction, citing Section 2(47A) of the Income Tax Act. The court asserted jurisdiction despite WazirX’s argument for a Singapore High Court-supervised restructuring, noting that the funds originated from India and the platform was accessed domestically. This decision sets a crucial precedent, establishing crypto holdings as distinct property rights rather than unsecured claims, significantly enhancing user protection during exchange insolvencies or restructuring.

This ruling offers substantial benefits by safeguarding user assets from being pooled and redistributed pro rata during financial distress, ensuring customers like Rhutikumari retain their specific holdings. It clarifies that local courts can retain jurisdiction over domestically funded and accessed crypto assets, regardless of international corporate restructuring proceedings. The decision aligns India with a growing number of jurisdictions that recognize crypto as property, reinforcing customer protections.

Globally, courts in the US, UK, and Singapore also treat crypto as property for various legal and remedial purposes. US courts routinely issue temporary restraining orders and seize crypto, though outcomes can depend on contractual structures, as seen in the Celsius Earn ruling. English courts grant proprietary injunctions and freezing orders against exchanges, exemplified by cases like AA v Persons Unknown and Fetch.ai v Persons Unknown, with Parliament moving to codify digital asset property concepts. Similarly, Singapore’s High Court has recognized NFTs and tokens as property, granting proprietary injunctions and confirming crypto can be held in trust, as highlighted in cases like CLM v CLN and Bybit v Ho Kai Xin.

Despite these global similarities, certain limitations exist. In the US, if an exchange’s Terms of Service transfer title (e.g., in “Earn” programs), users might become unsecured creditors in insolvency. In the UK, while robust, relief can be case-specific and some injunctions have been discharged on facts. However, India’s explicit framing of crypto as trust property and its assertion of jurisdiction provide a strong framework that prioritizes individual property rights over general pooling schemes, offering a clearer path for customer remedies and solidifying the legal foundation for digital asset ownership.

(Source: https://cryptoslate.com/landmark-ruling-in-india-treats-xrp-as-property-not-speculation/)