WazirX’s plan to use customers’ XRP to offset losses from its $230 million July 2024 exploit has been rejected.
By Godfrey Benjamin
Editor Hamza Tariq
Updated
2 mins read
An Indian court has prevented WazirX, the crypto exchange that suffered a breach, from reallocating users’ XRP XRP $2.64 24h volatility: 1.2% Market cap: $158.47 B Vol. 24h: $4.79 B assets.
According to the Madras High Court, cryptocurrencies are regarded as property, citing fundamental property rights. It also clarified that the customer’s XRP and what was stolen from WazirX are “completely different” digital assets.
On October 25, an order was delivered by the Madras High Court, stating that WazirX was barred from redistributing 3,532 XRP holdings, which belong to a customer, to absorb the platform losses.
The stash in question is worth roughly $9,400. By this declaration, Justice N. Anand Venkatesh for the court has granted the user “interim protection.”
For context, the Indian crypto exchange is trying to get its users to absorb a portion of the loss that it suffered following a $230 million exploit in July 2024.
This includes even those who do not hold ERC-20 tokens, like the XRP holders. It calls this move a “socialization of losses” in line with its restructuring plan.
Judge Venkatesh hardly spoke against the plan, but he also did not agree that those without ERC-20 tokens should bear any loss.
In his opinion, the plan should not apply to this set of people because the siphoned digital assets were ERC-20 tokens, which are “completely different cryptocurrencies.”
On the premise that digital assets can be possessed, the Madras High Court noted that they are categorized as property.
Based on fundamental property rights, which the court centered its ruling on, users’ XRP assets should remain theirs. In no instance should it be used to compensate for WazirX’s operational failures.
In addition to taking sides with the XRP holder, the court concluded that he is “entitled to an interim protection” under the country’s Arbitration and Conciliation Act.
Meanwhile, WazirX resumed operations on October 24 after the High Court of Singapore approved its restructuring plan.
To make its relaunch significant, the exchange introduced zero trading fees, which will last for at least 30 days. It is hoping to restore full functionality by October 27.
WazirX founder Nischal Shetty noted that the zero trading fee initiative is aimed at rebuilding confidence. He hopes that users can return to trading freely as the platform reopens.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.