In a landmark ruling, the Madras High Court has declared that cryptocurrency qualifies as property under Indian law, affirming that digital assets can be owned, enjoyed, and even held in trust. The judgment, delivered by Justice N Anand Venkatesh, marks one of India’s most significant legal recognitions of crypto assets within the country’s legal framework.
“There can be no doubt that cryptocurrency is property. It may not be tangible or legal tender, but it possesses the essential attributes of property — it can be enjoyed, possessed, and held in trust,” Justice Venkatesh said in his order.
The court’s observation came while hearing a plea from an investor whose holdings on WazirX, a major Indian cryptocurrency exchange operated by Zanmai Labs Pvt Ltd, were frozen after a cyberattack in July 2024 that resulted in losses of around $230 million worth of Ethereum and ERC-20 tokens.
Investor Seeks Legal Safeguard for XRP Holdings
The petitioner had purchased 3,532.30 XRP tokens worth ₹1,98,516 in January 2024 and argued that her assets were unaffected by the hack, which targeted only Ethereum-based coins. She sought relief under Section 9 of the Arbitration and Conciliation Act, 1996, requesting the court to ensure her holdings were not redistributed during ongoing proceedings.
Zanmai Labs and its directors opposed the petition, claiming that their Singapore-based parent firm Zettai Pte Ltd was undergoing restructuring under a Singapore court order requiring all users to share in the losses.
Justice Venkatesh, however, rejected Zanmai’s argument, clarifying that the XRP holdings were distinct from the compromised ERC-20 tokens.
“The applicant’s cryptocurrency holdings were in XRP, whereas the hack affected only ERC-20 tokens. These are entirely different digital assets,” the judge noted.
Crypto as a ‘Virtual Digital Asset’ Under Indian Law
The court elaborated that cryptocurrencies are identifiable, transferable, and controlled through private keys, giving them characteristics akin to property ownership. Referring to Section 2(47A) of the Income Tax Act, 1961, Justice Venkatesh said Indian law already recognises cryptocurrencies as Virtual Digital Assets (VDAs), which are not speculative in nature.
Indian Jurisdiction Upheld
Rejecting Zanmai’s claim that the case should be heard in Singapore, the court cited the Supreme Court’s 2021 judgment in PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd to assert that Indian courts can intervene to protect assets located within India.
Since the investor’s transactions were conducted from Chennai using an Indian bank account, part of the dispute clearly fell under Madras High Court’s jurisdiction, the judge held.
Justice Venkatesh also emphasized that Zanmai Labs, registered with the Financial Intelligence Unit (FIU), is authorised to handle cryptocurrency in India — unlike its Singapore-based parent Zettai Pte Ltd or Binance.
“It is Zanmai Labs that is registered as a reporting entity in India and authorised to handle cryptocurrencies domestically. Neither Zettai nor Binance enjoys such registration,” he observed.
Call for Stronger Corporate Governance in Web3
In his concluding remarks, Justice Venkatesh underscored the need for Web3 and crypto firms to maintain high corporate governance standards, including segregated client funds, independent audits, and robust KYC and AML compliance. He stressed that the judiciary would play a vital role in shaping the rights, responsibilities, and trust structures of India’s emerging digital asset economy.
This ruling could become a defining precedent in how Indian courts interpret digital assets and investor protection in the crypto ecosystem, especially as regulatory clarity continues to evolve.
