Bombay High Court Orders WazirX to Secure Funds for CoinSwitch
- High Court mandates Zanmai Labs provide $5.4 million bank guarantee.
- CoinSwitch assets impacted by $234 million hack.
- Legal precedent for custodial responsibility in India.
The Bombay High Court ruled on October 9, 2025, requiring Zanmai Labs to provide a $5.4 million bank guarantee to CoinSwitch after a significant hack.
This decision underscores custodial accountability in crypto exchanges, potentially influencing future legal frameworks and investor trust in digital assets.
The Bombay High Court has instructed Zanmai Labs, operator of WazirX, to provide a $5.4 million bank guarantee to CoinSwitch following a hack affecting their assets.
This decision emphasizes custodial accountability and establishes a benchmark for legal recourse in India’s crypto industry.
WazirX Ordered to Secure $5.4 Million Bank Guarantee
The Bombay High Court’s ruling on October 9, 2025, requires Zanmai Labs to secure a bank guarantee for CoinSwitch. This action follows the freezing of CoinSwitch’s assets after a $234 million hack on WazirX.
Justice Somasekhar Sundaresan presided over the case, dismissing arguments involving Binance‘s cybersecurity responsibilities. The court emphasized Zanmai’s custodial accountability, despite any third-party agreements. As Justice Somasekhar Sundaresan noted, “If assets are held in the custody of a person under an agreement, it is for the person in whose custody those assets are held to be accountable for the custody of those assets.” Bombay High Court Ruling
Court’s Ruling Sets New Custodial Liability Standard
This ruling sets a precedent in the Indian market for custodial liability within the crypto sector. This encourages exchanges to reinforce digital asset protections and provides a pathway for affected entities to recover losses.
The financial requirement on Zanmai Labs may prompt re-evaluation of security protocols and risk management. CoinSwitch stands to recover a portion of its frozen assets, enhancing trust among investors and stakeholders.
Comparisons to Bitfinex and Mt.Gox Cases
This court decision resembles previous resolutions in cases like Bitfinex and Mt.Gox, where exchanges were held accountable. India’s judicial stance on crypto custodial duties marks a notable shift in legal standards.
Experts predict this ruling could strengthen regulatory frameworks and influence future litigations in the crypto space, while driving exchanges to adopt improved risk assessments and insurance measures.
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