The Madras High Court has officially recognized cryptocurrency as property under Indian law, a significant step in the evolving landscape of digital asset regulation. The judgment, delivered by Justice Anand Venkatesh, clarifies that while cryptocurrency is intangible and not considered legal tender, it meets the criteria to be classified as property, capable of ownership, enjoyment, and even being held in trust.
Madras High Court Recognizes Cryptocurrency as Property
This ruling came in the case of Rhutikumari v. Zanmai Labs Pvt Ltd, where the petitioner, an investor, sought legal protection after her XRP holdings on the WazirX platform were frozen following a cyberattack in 2024.
The investor had purchased XRP tokens worth ₹1,98,516 in January 2024, and her portfolio was associated with the WazirX platform. However, in July 2024, WazirX reported a cyberattack in which its cold wallets were compromised, affecting Ethereum and ERC-20 tokens but not the investor’s XRP coins.
The investor argued that her XRP assets were unaffected by the cyberattack and that they were held by WazirX as a custodian in trust. Seeking protection under Section 9 of the Arbitration and Conciliation Act, 1996, she requested an injunction to prevent the redistribution of her assets until the dispute was resolved.
Jurisdiction Dispute and Court’s Ruling
The respondents, including Zanmai Labs, opposed the claim, citing restructuring proceedings initiated by their Singapore-based parent company, Zettai Pte Ltd. The respondents argued that the Singapore High Court had approved a scheme in which all users would share the losses proportionally. They also contended that the Madras High Court lacked jurisdiction since arbitration was supposed to take place in Singapore.
However, Justice Venkatesh rejected this argument, ruling that the Madras High had jurisdiction. He emphasized that a portion of the cause of action arose within India, as the investor’s funds had been transferred from a local bank account, and the platform was accessed from within India.
Additionally, the court noted that Zanmai Labs, which operated the Indian segment of WazirX, was a registered entity under Indian law, while Zettai and Binance were not.
Implications for Crypto Ownership in India
The judgment marks a key development for cryptocurrency users in India. By recognizing cryptocurrency as property, the court ensures that digital assets are treated similarly to other forms of property in legal disputes.
The decision to grant interim relief to the investor prevents the redistribution or reallocation of her XRP holdings until the dispute is resolved.
This ruling provides more legal clarity and protection for crypto investors in India, reinforcing the idea that cryptocurrencies can be owned, held in trust, and subject to legal safeguards.
