The Madras High Court has ruled that cryptocurrency qualifies as property under Indian law, granting it legal protection for ownership and possession. In a landmark case involving investor Rhutikumari and WazirX, the court barred the exchange from reallocating her XRP holdings until arbitration concludes, affirming crypto’s status as a protectable asset.
Madras High Court recognizes cryptocurrency as property: The ruling clarifies that crypto, though not legal tender, possesses essential features like ownership and transferability.
The decision protects unaffected user assets post-WazirX hack, distinguishing XRP from stolen ERC-20 tokens for separate treatment.
Indian courts gain jurisdiction over domestic crypto transactions, citing precedents like PASL Wind Solutions v. GE Power Conversion India, with WazirX registered under FIU-IND.
Madras High Court cryptocurrency property ruling protects Indian investors’ digital assets. Learn how this landmark decision safeguards holdings amid exchange hacks and arbitration. Stay informed on crypto legal developments.
What did the Madras High Court rule on cryptocurrency as property?
Madras High Court cryptocurrency property verdict establishes that digital assets like cryptocurrencies are legally recognized as property in India, capable of ownership, possession, and trust. Justice N. Anand Venkatesh emphasized that despite not being legal tender, crypto exhibits all core attributes of property, including transferability via private keys. This first-of-its-kind ruling provides crucial legal safeguards for investors following the WazirX hack.
How does this ruling impact crypto investors in India?
The decision stems from the Rhutikumari vs. WazirX case, where an investor’s 3,532.30 XRP coins, worth approximately ₹1.98 lakh, were frozen after a July 2024 hack that stole $230 million in Ethereum and ERC-20 tokens. The court rejected WazirX’s attempt to include unaffected assets in loss-sharing under a Singapore-approved restructuring plan by Zettai Pte Ltd. Instead, it granted interim relief, prohibiting reallocation of her holdings until arbitration under the Arbitration and Conciliation Act, 1996, resolves the matter. This protects vulnerable parties from substantial erosion of assets, as noted in the judgment. Drawing on precedents such as Ahmed GH Ariff v. CWT and Jilubhai Nanbhai Khachar v. State of Gujarat, the court defined property broadly as any valuable right or interest. Global cases like Ruscoe v. Cryptopia Ltd. from New Zealand and AA v. Persons Unknown from the UK further supported classifying crypto as identifiable and controllable digital property. In India, Section 2(47A) of the Income Tax Act, 1961, already treats it as a Virtual Digital Asset, not a speculative transaction, enhancing its legal standing. For investors, this means platforms must segregate user funds, conduct audits, and adhere to KYC and anti-money laundering norms, reducing risks seen in failures like Mt. Gox and FTX.
Frequently Asked Questions
Does the Madras High Court ruling make cryptocurrency legal tender in India?
No, the ruling explicitly states that cryptocurrency is not legal tender but qualifies as property under Indian law. It can be owned, possessed, and held in trust, providing protection against unauthorized actions by exchanges, but it does not confer currency status for payments or transactions.
What protections does this decision offer against crypto exchange hacks in India?
The verdict ensures that unaffected crypto holdings, like XRP in distinct wallets, remain separate from hacked assets such as ERC-20 tokens. Indian courts can intervene to preserve these assets during foreign-seated arbitrations, emphasizing the need for platforms to maintain segregated storage and comply with FIU-IND registration for operations in the country.
Key Takeaways
- Cryptocurrency recognized as property: The Madras High Court affirms crypto’s legal status, enabling ownership rights and court protections for digital assets in India.
- Investor safeguards post-hack: Unaffected holdings are shielded from redistribution, as seen in the WazirX case, promoting accountability among exchanges.
- Judicial jurisdiction established: Domestic transactions give Indian courts authority, requiring platforms to follow local laws regardless of international restructuring plans.
Conclusion
The Madras High Court cryptocurrency property ruling marks a pivotal shift in India’s treatment of digital assets, integrating them into the legal framework as protectable property while upholding crypto investors in India rights. By addressing jurisdictional challenges and emphasizing platform responsibilities, it fosters greater confidence in the ecosystem. As regulatory clarity evolves, investors should prioritize secure platforms and stay vigilant on compliance, positioning India as a more robust hub for cryptocurrency innovation.
The Madras High Court granted interim protection to the investor’s XRP holdings, barring WazirX from reallocating them until arbitration concludes.
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 crypto currencies 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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