In a historic judgment, the Madras High Court has ruled that cryptocurrency qualifies as property under Indian law, capable of ownership, possession, and being held in trust.
Delivering the verdict, Justice N Anand Venkatesh clarified that even though cryptocurrencies aren’t legal tender, they still have all essential features of property.
“There can be no doubt that ‘crypto currency’ is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust,” the Court said.
The ruling is the first time an Indian court has officially recognised cryptocurrency as a legitimate, legally protectable asset.
The Case: Rhutikumari vs WazirX
The case began when Rhutikumari, an investor, discovered that her cryptocurrency holdings had been frozen after the WazirX hack in July 2024. She had invested ₹1.98 lakh to purchase 3,532.30 XRP coins on WazirX, which is operated by Zanmai Labs Pvt Ltd.
When hackers stole around $230 million worth of Ethereum and ERC-20 tokens, WazirX froze every user account, including hers, even though her XRP had nothing to do with the stolen funds.
Rhutikumari argued that her coins were separate from the hacked tokens and that WazirX was holding them in trust on her behalf. She went to court seeking protection under Section 9 of the Arbitration and Conciliation Act, 1996, asking the Madras High Court to stop WazirX from redistributing or touching her crypto under its Singapore-based restructuring plan.
WazirX countered that its Singapore-based parent, Zettai Pte Ltd, was implementing a Singapore High Court-approved scheme requiring users to share losses from the hack.
Rejecting that claim, Justice Venkatesh said: “What were held by the applicant as cryptocurrencies were 3532.30 XRP coins. What were subjected to cyber attack… were ERC 20 coins, which are completely different.”
Crypto as Property in Indian Law
The Court examined whether crypto fits within the legal meaning of “property.” Citing precedents like Ahmed GH Ariff v. CWT and Jilubhai Nanbhai Khachar v. State of Gujarat, Justice Venkatesh said property includes “every species of valuable right and interest.”
Drawing on global rulings — Ruscoe v. Cryptopia Ltd (New Zealand) and AA v. Persons Unknown (UK) — the Court observed that cryptocurrencies are definable, identifiable, transferable, and capable of exclusive control through private keys, making them property in legal terms.
It also noted that India already classifies them as Virtual Digital Assets under Section 2(47A) of the Income Tax Act, 1961.
“In the Indian law regime, the cryptocurrency is treated as a virtual digital asset and it is not treated as a speculative transaction,” the judgment said.
This classification means that while crypto isn’t recognised as currency, it now holds the same legal protection as other intangible assets.
Jurisdiction and Local Connection
Zanmai Labs argued that the matter belonged to Singapore’s jurisdiction since the arbitration was seated there. The Court rejected WazirX’s argument and pointed to the PASL Wind Solutions v. GE Power Conversion India (2021) ruling, which clearly says that Indian courts can step in to protect assets within the country, even if the arbitration is taking place abroad.
Justice Venkatesh observed that Rhutikumari had transferred the money from her Kotak Mahindra Bank account in Chennai and used the WazirX platform from India, which was enough to give the Madras High Court the right to hear the case. That, he said, was enough to give the Madras High Court the authority to hear the case.
He also highlighted an important detail — Zanmai Labs, the company running WazirX in India, is officially registered with the Financial Intelligence Unit (FIU), while Zettai Pte Ltd (its Singapore parent) and Binance are not registered to operate under Indian law.
“It is the first respondent which got registered as a reporting entity and is, therefore, authorized to handle crypto currency in India,” the Court said.
Explaining Crypto and Global Context
To help define cryptocurrency, the Court referenced Lee Reiners’s Duke Law paper, “10 Things Judges Should Know About Cryptocurrency.” It explained that crypto replaces institutional trust with technology-based validation through blockchain.
Justice Venkatesh compared cryptocurrencies to dematerialised shares, saying both represent digital forms of ownership. But unlike company shares, which show actual ownership in a business, crypto’s worth depends purely on how the market values it.
He also referred to some of the biggest global exchange failures — Mt. Gox, FTX, and Gatecoin — to show what happens when there’s no accountability. The Court underlined that crypto platforms must follow basic corporate standards: keep user assets separate, get independent audits done, and strictly follow KYC and anti-money laundering rules.
The Verdict
Since the court found that the investor’s XRP holdings were not affected by the hack, it granted her interim protection. WazirX and its directors have been barred from redistributing or reallocating her crypto until the arbitration process is completed.
“If, ultimately, based on the modified scheme approved by the Singapore High Court on 13.10.2025, the asset held by the applicant stood eroded substantially, the applicant becomes a vulnerable party, who will be entitled for protection,” Justice Venkatesh added.
Advocate D Ravichander represented the applicant, while Senior Advocate Satish Parasaran and Advocate Vishnu Mohan appeared for WazirX. Other directors were represented by Advocate Aditya Reddy.
Why It Matters
This ruling doesn’t make crypto legal tender, but it finally gives it something that really matters — a place in the law.
For Indian investors, this comes as a real sense of relief. After years of not knowing where crypto stood legally, the court has finally made it clear — crypto counts as property. In simple terms, it can be owned, protected, and taken to court if anything goes wrong.
By calling crypto a form of property, the Madras High Court has filled a major void in how India views digital assets. It’s an acknowledgment that, even though these assets exist only online, their value and ownership are genuine and deserve protection under the law.
After years of uncertainty, crypto in India is no longer just a virtual concept. It now has recognition, substance, and a place within the country’s legal system.
Also Read: India’s Crypto Paradox: Ads, Ambassadors, and a Silent Policy
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