The Madras High Court has ruled on Saturday that cryptocurrency counts as property under Indian law. This means people can own it and even hold it in trust. Justice N Anand Venkatesh said that although cryptocurrencies are not physical objects or legal currency, they still have all the main 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 case came after a cyberattack on the WazirX exchange, run by Zanmai Labs Pvt Ltd. An investor had bought 3,532.30 XRP coins worth Rs 1,98,516 in January 2024. In July that year, WazirX revealed that one of its cold wallets was hacked, causing a loss of about $230 million in Ethereum and ERC-20 tokens. After the attack, all user accounts were frozen, including the investor’s.
Investor seeks legal protection
The investor argued that her XRP coins were different from the stolen Ethereum tokens and were held in trust by WazirX. She asked for protection under Section 9 of the Arbitration and Conciliation Act, 1996, so that the company would not redistribute her holdings. Zanmai Labs and its directors opposed this, saying their Singapore-based parent company, Zettai Pte Ltd, was restructuring under a Singapore court order that required all users to share losses.
Justice Venkatesh rejected Zanmai Labs’ argument. He said the applicant’s XRP coins were not part of the hack, which only affected Ethereum-based tokens.
“What were held by the applicant as crypto currencies were 3532.30 XRP coins. What were subjected to cyber attack on 18.7.2024 in the WazirX platform were ERC 20 coins, which are completely different crypto currencies not held by the applicant,” the Court observed.
Justice Venkatesh explained that cryptocurrencies are identifiable, transferable, and controlled exclusively through private keys, making them a kind of property. He also cited Section 2(47A) of the Income Tax Act, 1961, which recognises cryptocurrencies as “virtual digital assets.” The Court noted: “In Indian law regime, the crypto currency is treated as a virtual digital asset and it is not treated as a speculative transaction.”
Distinction between Indian and foreign entities
The Court also dismissed the claim that it had no jurisdiction because the arbitration was seated in Singapore. Referring to the Supreme Court’s decision in PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd (2021), the judge said that Indian courts can protect assets located in India. Since the investor’s transactions were made from Chennai and involved an Indian bank account, part of the case fell under the Madras High Court’s jurisdiction.
Justice Venkatesh pointed out that Zanmai Labs is registered with India’s Financial Intelligence Unit (FIU) and is allowed to handle cryptocurrency in India, unlike Zettai Pte Ltd or Binance. “In the present case, it is the first respondent, which got registered as a reporting entity and is, therefore, authorised to handle crypto currency in India. Neither the Zettai nor Binance is registered as a reporting entity in India,” he observed.
Justice Venkatesh said that Web3 and crypto platforms must follow the same corporate governance standards as other businesses, with separate client funds, independent audits and strong KYC and anti-money laundering checks. He concluded that courts now play a key role in defining rights, responsibilities and trust in the digital economy.