Chennai, India — In a paradigm-shifting judgment that reshapes how India’s legal system views digital assets, the Madras High Court has ruled that cryptocurrencies qualify as property under Indian law. The verdict, delivered by Justice N. Anand Venkatesh, establishes that while cryptocurrencies cannot be considered legal tender, they are nonetheless assets capable of ownership, transfer, and legal protection.
Investor’s Petition Leads to Legal Precedent
The case began when an investor approached the court after her 3,532.30 XRP tokens, valued at around ₹1.98 lakh, were frozen by the cryptocurrency exchange WazirX following a major cyberattack in July 2024.
The breach targeted Ethereum and ERC-20 tokens, resulting in an estimated loss of $230 million (approximately ₹1,900 crore) and prompted the platform to impose a blanket freeze on user accounts.
The petitioner argued that her XRP holdings were unrelated to the hacked tokens and should not be subject to the same restrictions. She sought relief under Section 9 of the Arbitration and Conciliation Act, 1996, requesting that Zanmai Labs Pvt. Ltd., the Indian operator of WazirX, be restrained from redistributing or reallocating her digital assets during the ongoing restructuring process.
Zanmai Labs contended that its Singapore-based parent company, Zettai Pte Ltd, was undergoing a court-supervised restructuring that required all users to share losses collectively. However, the High Court rejected this defense, observing that the petitioner’s assets were distinct from the ERC-20 tokens involved in the hack.
Justice Venkatesh ruled that the exchange could not impose collective loss-sharing on unrelated digital assets, noting that “the tokens affected by the cyberattack were ERC-20 coins, which are entirely different from the petitioner’s XRP holdings.”
Court’s Stance: Cryptocurrency as Property
In his judgment, Justice Venkatesh explained that although cryptocurrencies are intangible and do not function as physical goods or official currency, they meet the legal definition of property.
He stated that these assets “can be enjoyed, possessed, and even held in trust,” reinforcing their capability of ownership and protection under law.
To support this interpretation, the court referred to Section 2(47A) of the Income Tax Act, which classifies cryptocurrencies as Virtual Digital Assets (VDAs). This legal category recognizes digital tokens as taxable and transferable assets, strengthening the basis for treating them as property under Indian statutes.
Jurisdiction and Legal Authority
Addressing the question of jurisdiction, the High Court noted that Indian courts have the authority to protect assets located within the country, even if international proceedings are underway. Justice Venkatesh cited the Supreme Court’s 2021 ruling in PASL Wind Solutions v. GE Power Conversion India, which affirmed that Indian courts retain the right to intervene in matters involving domestic assets despite foreign arbitration.
Since the petitioner’s crypto transactions were initiated in Chennai and linked to an Indian bank account, the Madras High Court asserted complete jurisdiction to hear the dispute.
Beyond resolving the individual case, Justice Venkatesh emphasized the urgent need for robust regulatory and governance frameworks for India’s cryptocurrency ecosystem.
The judgment recommended several safeguards to protect users and maintain market integrity, including:
• Independent audits of cryptocurrency exchanges,
• Segregation of customer funds from company finances, and
• Stronger KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance mechanisms.
The court underlined that as India transitions toward a Web3-driven economy, accountability, transparency, and investor protection must remain central to digital asset governance.
Impact on India’s Crypto Industry
Legal and financial experts view the judgment as a turning point in India’s treatment of digital assets.
By recognizing cryptocurrencies as property, the ruling gives investors a clearer legal foundation for ownership rights and judicial remedies in case of disputes. It also urges exchanges to improve corporate governance and adopt transparent practices when managing customer funds.
“This verdict brings long-needed clarity,” said a corporate lawyer specializing in digital finance. “It does not make crypto legal tender, but it ensures that investors’ holdings are legally recognized as assets, something the Indian market has lacked.”
The decision is expected to influence future policy discussions surrounding the Digital India Act and the government’s Virtual Digital Asset Taxation framework, both of which are likely to define how crypto businesses and investors operate in the country.
A Legally Secure Digital Future
By aligning India’s legal reasoning with international trends, the Madras High Court has placed the judiciary at the forefront of global crypto jurisprudence. Similar to rulings in the UK, Singapore, and the United States, this decision formally acknowledges that cryptocurrencies hold measurable economic value and are capable of legal protection.
While the ruling does not alter the Reserve Bank of India’s stance that cryptocurrencies are not legal currency, it does mark a decisive step toward legal maturity in digital asset regulation.
It signals a future where blockchain-based assets will coexist within a structured legal framework, allowing innovation and investor protection to advance together.
