- An Indian High Court’s interim ruling in the Rhutikumari vs. Zanmai Labs Case declared XRP as property.
- The landmark decision aligns the token with non-physical assets such as patents, copyrights, trademarks, software, shares, bonds, and other digitized financial instruments.
A recent landmark court ruling established a new precedent for the classification of XRP in India. In the case of an investor identified only as Rhutikumari versus WazirX operator Zanmai Labs, the nation’s High Court’s interim decision qualified the asset as “property under Indian Law, capable of ownership and being held in trust.”
Facts of the Rhutikumari vs. Zanmai Labs Lawsuit
The act served as the tipping point of Rhutikumari’s petition, challenging WazirX’s freezing of her 3,532.30 XRP assets following a hacking incident in the Indian crypto exchange in July 2024. For context, the platform, founded in 2018, implements a mechanism called “socialization of losses,” which spreads financial failures across all of its users. The company implemented the measure to mitigate the impact of the cybersecurity attacks and economic losses by requiring users to share financial losses on a pro rata basis.
Rhutikumari’s party argued that such an act violates property rights under Indian law. WazirX countered the argument, questioning the taxonomy of XRP in India and noting that its operations are not within the High Court’s jurisdiction, as it acquired approval for its restructuring from the Singapore High Court.
The Interim Ruling and Order
The petitioner successfully convinced Justice N. Anand Venkatesh that XRP falls within the category of intangible but ownable property. This aligns the token with non-physical assets such as patents, copyrights, trademarks, software, shares, bonds, and other digitized financial instruments.
Additionally, the judge declared that Rhutikumari funded her WazirX account via an Indian bank. Likewise, she accessed the crypto exchange in India. Hence, these effectively affirmed the High Court’s jurisdiction in the subject.
As a result, Venkatesh issued a restraining order against WazirX, preventing it from redistributing, apportioning, or reallocating Rhutikumari’s XRP holdings. Moreover, the judge ordered the respondent to issue a bank guarantee in the amount of approximately $11,500 in favor of the petitioner.
Implications for XRP and Crypto
The interim ruling in the Rhutikumari versus Zanmai Labs case significantly elevates XRP from being merely a speculative instrument and paves the way for legal protections around other crypto assets. It also offers regulatory clarity for digital assets in India.
Furthermore, the issue imposes a fiduciary duty on crypto exchanges operating in the country to segregate their user funds. The event prevents these entities from forcing their users to bear the brunt of financial losses under the guise of “socialization of losses” resulting from their operational failures. It also sets higher standards for corporate governance at digital asset exchanges, making them more accountable for incidents directly affecting their users’ funds.
Overall, the High Court’s decision mirrors the treatment of major markets like the US, UK, and Singapore of XRP and other cryptocurrencies, which grants them property classification for claims and taxation purposes.
What’s your Reaction?
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
