⚖️ Madras High Court Recognises Cryptocurrency as Property Under Indian Law

Published on October 28, 2025 | By Delhi Law Academy

In a landmark judgment dated 26 October 2025, the Madras High Court ruled that cryptocurrencies qualify as “property” under Indian law — assets capable of being owned, possessed, and held in trust. This ruling, delivered by Justice N Anand Venkatesh, has major implications for investors, exchanges, and regulators in India’s evolving crypto ecosystem.

🧑‍⚖️ Case Background: The WazirX–XRP Dispute

The case arose from a dispute between an Indian investor and Zanmai Labs Pvt. Ltd., the operator of the popular crypto exchange WazirX. The petitioner had purchased 3,532.30 XRP coins using funds from an Indian bank account. Following the July 2024 WazirX hack, which targeted Ethereum-based tokens, the investor’s XRP holdings were frozen and reallocated as part of the company’s “socialisation of losses” plan.

The investor approached the Madras High Court, arguing that her coins were unaffected by the hack and that WazirX had no legal right to redistribute them. WazirX, on the other hand, contended that its restructuring plan, approved by a Singapore court, applied globally to all user assets.

⚖️ Key Legal Issues Before the Court

• Whether cryptocurrencies such as XRP are legally recognised as “property” under Indian law.
• Whether WazirX could lawfully reallocate user-owned crypto assets under its restructuring plan.
• Whether Indian courts have jurisdiction when part of the cause of action (bank account, user access) arose in India.

📜 The Court’s Holding

Justice Venkatesh delivered a detailed ruling holding that:

“Cryptocurrency, though intangible, possesses the attributes of property — it is identifiable, transferable, and capable of being owned, possessed, and held in trust.”

The court therefore issued an interim injunction restraining WazirX from redistributing or reallocating the petitioner’s XRP holdings. The judge emphasised that these coins were not part of the stolen tokens from the hack and thus could not be subject to the loss-sharing plan.

📍 Jurisdiction and Legal Reasoning

The court rejected WazirX’s claim that the Singapore court order automatically bound Indian users. It noted that:

• The petitioner’s account and transactions were initiated from India.
• The consideration originated from an Indian bank account.
• Part of the cause of action therefore arose within India, giving the Madras High Court territorial jurisdiction.

The judgment carefully applied existing principles under the Transfer of Property Act and Indian Trusts Act, concluding that cryptocurrency can indeed be “property” in the legal sense, even though it is digital and intangible.

💡 Why This Judgment Matters

This is one of the first Indian High Court rulings to directly characterise cryptocurrencies as property. It creates persuasive precedent for similar disputes and clarifies how Indian courts may treat digital assets going forward.

For Investors

This ruling provides strong legal support for users claiming ownership over crypto assets held on exchanges. It implies that platforms act as custodians or trustees — not owners — of user-held tokens.

For Exchanges

Platforms like WazirX may now face heightened fiduciary responsibilities towards their users. Redistributing or “pooling” user assets without consent may amount to a breach of trust.

For Law Students and Judiciary Aspirants

The case provides an excellent study of how courts interpret traditional legal concepts like property, trust, and jurisdiction in the context of emerging digital technologies. Expect this case to feature in exam questions and essays for upcoming Judiciary, CLAT PG, and LLM exams.

📚 Broader Legal Context

India still lacks a comprehensive framework for regulating cryptocurrencies. The government has not passed specific legislation recognising crypto as a legal tender or asset class. However, this judgment may influence how regulators and courts approach digital assets in the future.

Previously, the Supreme Court of India (2020) had struck down the RBI’s circular that effectively banned banking services for crypto entities. Since then, exchanges like WazirX have operated in a grey zone, with taxation (30% on crypto gains) but without a clear classification under property law. This ruling fills that gap — at least temporarily.

🚨 Limitations of the Ruling

• The judgment is an interim injunction, not a final decision on ownership rights.
• It applies specifically to the petitioner’s case and does not automatically bind all exchanges.
• As a High Court ruling, it is persuasive but not binding nationwide until affirmed by the Supreme Court.

Nevertheless, the reasoning offers valuable guidance for courts and policymakers navigating the legal treatment of crypto assets.

🔍 Key Takeaways

• Madras High Court recognises cryptocurrency as “property” under Indian law.
• WazirX barred from reallocating user’s XRP coins pending trial.
• Cryptocurrency can be owned, possessed, and held in trust.
• Indian courts can exercise jurisdiction if part of the cause of action arises in India.
• The ruling strengthens user rights and could influence future legislation.

📘 Conclusion

The Madras High Court’s ruling marks a significant step toward legal recognition of cryptocurrencies in India. By affirming that digital assets have property-like characteristics, the court bridges the gap between traditional property law and modern technology. For law students and practitioners alike, this decision is a reminder that the Indian judiciary continues to adapt classical doctrines to the challenges of the digital age.

👉 For Judiciary and LLM Aspirants:

Stay updated on such evolving judgments — they often form the basis for Current Legal Developments questions in law exams. For more expert guidance, visit www.delhilawacademy.com.

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