The Madras High Court has ruled that cryptocurrency counts as “property” under Indian law. This means digital coins like Bitcoin or XRP can be owned, sold, or passed on just like land or gold. The court upheld the seizure of some digital assets in a fraud case but made it clear that owners have strong rights over their holdings. In a big decision on October 25, Justice N. Anand Venkatesh said crypto is not cash or something you can touch, but it has all the marks of property – you can control it, move it around, and keep it safe in a trust.
This ruling came in a case where a woman from Chennai asked the court to protect her XRP coins on the WazirX app. Her coins got stuck after a big cyber hack hit the platform in July 2024. The hack stole over $230 million in Ethereum and other tokens, but her XRP was safe. Still, WazirX froze everything and wanted users to share the loss. The court said no – her coins are hers alone. “There can be no doubt that cryptocurrency 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,” the judge wrote in his 54-page order.
For everyday Indians dipping into crypto, this is huge news. With over 100 million people trading digital coins here, many worry about hacks or rules. Now, courts can step in to guard your wallet, even if the company is based abroad. It also lines up with tax laws that call crypto “virtual digital assets.” But experts say India still needs clearer rules to stop scams and build trust.
The Case That Started It All: A Woman’s Fight for Her XRP Coins
Let’s go back to January 2024. Rhutikumari, a regular investor from Chennai, used her Kotak Mahindra Bank account to buy 3,532.30 XRP coins on WazirX for about Rs 1.98 lakh. XRP is a popular token for fast payments, not the Ethereum stuff that got hit in the hack. She linked her email and phone to the app, just like anyone would.
Then, on July 18, 2024, hackers broke into WazirX’s cold wallet – a super-secure offline storage. They took $230 million in Ethereum and ERC-20 tokens. WazirX, run by Zanmai Labs in India but owned by Singapore’s Zettai Pte Ltd, panicked. They froze all user accounts to stop more theft. Rhutikumari’s XRP was locked too, even though it was on a different blockchain and untouched.
WazirX went to Singapore court for a fix. The plan? Make all users share the loss, cutting everyone’s holdings by a bit. Rhutikumari said that’s unfair – her coins weren’t stolen. She filed a petition in Madras High Court under Section 9 of the Arbitration Act to get quick help before the big Singapore fight.
Zanmai fought back. They said the court has no say because the user agreement points to Singapore arbitration. Plus, they argued crypto isn’t “property” you can claim in India – it’s just data on a chain. Their CEO, Nischal Shetty, even said Zanmai only handles the rupee side; the real wallets are abroad. But the judge didn’t buy it. He pointed out Rhutikumari bought from Chennai with an Indian bank, so part of the deal happened here. Zanmai is also registered with India’s Financial Intelligence Unit (FIU), so they follow local rules.
In the end, the court ordered Zanmai to put Rs 9.56 lakh in an escrow account or give a bank guarantee. This covers the current value of her XRP until the full case wraps up. No sharing losses for her.
Why Crypto Fits as ‘Property’: Breaking Down the Court’s Words
Justice Venkatesh spent pages explaining why crypto is property. Indian law sees property as any valuable right – not just houses or cars. He looked at old Supreme Court cases like Ahmed GH Ariff vs CWT (1960s) and Jilubhai Nanbhai Khachar vs State of Gujarat (1994). These say property includes things you can own, use, and pass on.
For crypto, it’s simple: Your private key lets you control it alone, like a key to your home. It’s identifiable on the blockchain – every coin has a trail. You can sell it or gift it. And under the Income Tax Act’s Section 2(47A), it’s already a “virtual digital asset” you pay tax on – 30% flat rate plus 1% TDS on trades. “It’s not speculative gambling; your money turns into something you can store and trade,” the judge said.
He also nodded to world courts. New Zealand’s Ruscoe vs Cryptopia (2020) called crypto “intangible property” in a trust. UK’s AA vs Persons Unknown (2019) let courts freeze crypto in scams. Even US cases like SEC vs Ripple (2023) treat tokens as assets. “It’s more than 1s and 0s – it’s yours,” the court quoted from Ruscoe.
This isn’t about making crypto legal money. RBI still says no to that. But for fights over ownership or theft, it’s a game-changer.
What This Means for You: Everyday Impacts on Crypto Users
If you’re one of the millions trading on apps like WazirX, CoinDCX, or Binance India, breathe easy. Your Bitcoin or Ethereum now has court backing as your property. In a hack, you can run to court to stop the exchange from dipping into your safe coins. It also helps in family matters – crypto can go in wills or divorce splits, just like shares.
Taxes stay the same, but enforcement gets easier. If someone owes tax on crypto gains, the government can seize it like any asset. For scams, like the ED’s recent bust of a Rs 640 crore fraud ring using crypto for betting, this ruling makes seizures legit.
But watch out: Courts want exchanges to act right. Justice Venkatesh said Web3 firms need separate user funds, regular checks, and strong ID rules to fight money laundering. “Treat users like bank clients – no mixing pots,” he warned.
On X (formerly Twitter), folks are buzzing. One post from @pumpius cheered: “HUGE!!! India’s High Court declares that crypto is property!!! New wave coming in!!!” Crypto fan @PeterBourg30061 broke it down: “This bolsters confidence post-WazirX hack… Expect ripple effects.” Even @LogicalIndians noted: “This judgment emerged after a cyberattack on WazirX… Reinforcing domestic rights over crypto portfolios.”
Expert Takes: Hopes, Worries, and What’s Next
Lawyers and traders see this as a turning point. Rashmi Deshpande, a tech lawyer helping WazirX victims, said: “The judgment gives renewed hope to investors to file claims in Indian courts. Singapore didn’t see WazirX as custodian, but now we have ground here.” Crypto expert Sharat Chandra called it “a defining moment for crypto jurisprudence in India.”
Dr. Anna Mathew, a fintech prof at IIT Madras, added: “This aligns with global trends but pushes India to regulate fast. Without full laws, hacks will keep happening. We need a Digital India Act that covers blockchain safely.” Union Minister Piyush Goyal echoed in October: “We tax crypto but don’t encourage it yet.” RBI’s Sanjay Malhotra wants central digital money over private coins to avoid risks.
For now, this ruling sets a path. Other high courts might follow, and it could reach the Supreme Court. Investors like Rhutikumari wait for full arbitration, but they know their coins are protected.
As India grows in tech, rulings like this bridge old laws and new money. Stay smart – use good apps, keep keys safe, and check rules. Crypto’s here, and now it’s legally yours.
Frequently Asked Questions (FAQs)
Q1: What did the Madras High Court exactly say about cryptocurrency?
A: The court ruled that crypto is “property” under Indian law. It’s not physical like gold or legal money like rupees, but you can own it, use its value, transfer it, and hold it in trust. Justice N. Anand Venkatesh said it has key traits: identifiable on blockchain, controllable with private keys, and valuable like any asset. This came from cases like Ahmed GH Ariff vs CWT, which broaden what “property” means. It matches Section 2(47A) of the Income Tax Act, calling crypto “virtual digital assets.” So, courts can protect it in disputes, hacks, or family claims.
Q2: What was the fraud case that led to this ruling?
A: It wasn’t a pure fraud but a cyber hack on WazirX in July 2024. Hackers stole $230 million in Ethereum and ERC-20 tokens. Investor Rhutikumari’s 3,532 XRP coins (bought for Rs 1.98 lakh) got frozen too. WazirX wanted users to share losses via a Singapore plan. She went to court saying her XRP was safe and hers alone. The judge agreed – XRP is different from the stolen stuff – and ordered protection. Zanmai Labs (WazirX’s Indian arm) had to escrow Rs 9.56 lakh for her coins’ value till arbitration ends. This sets a way to seize bad assets but shield good ones.
Q3: How does this affect crypto taxes and rules in India?
A: Taxes don’t change – still 30% on gains and 1% TDS on trades over Rs 50,000. But now, unpaid taxes can lead to property-like seizures. It helps in inheritance: crypto goes in wills without fights. For rules, exchanges must register with FIU, keep user funds separate, and do KYC. The court said follow bank-like standards to avoid mess. RBI still bans banks from crypto dealings, but this pushes for better oversight. Experts say it speeds up a full crypto law.
Q4: Can I use this ruling if my crypto is stuck on an exchange?
A: Yes, if part of your deal happened in India – like buying with an Indian bank or using an FIU-registered app. Courts can step in under Arbitration Act Section 9, even for foreign fights, to protect assets here. In WazirX’s case, Chennai buys gave jurisdiction. If hacked or frozen unfairly, file a petition for quick relief. But get a lawyer – each case checks facts like where you traded. This helps against loss-sharing in insolvencies too.
Q5: Is cryptocurrency now legal tender in India because of this?
A: No. The ruling says it’s property, not money you can spend at shops. RBI and government still see it as risky – no backing like rupees. You can’t pay taxes or bills in Bitcoin yet. But as property, it’s safer for owning and trading. This fits the “tax and regulate” path, not ban. Global spots like EU treat it similar, but India needs its own rules for stability.
Q6: What should crypto users do next after this ruling?
A: Keep records of buys – bank slips, wallet addresses. Use FIU apps like WazirX or CoinSwitch. Back up private keys offline. If trouble hits, note Indian links for court help. Watch for new laws – maybe in Budget 2026. Join groups like Crypto Investors India for tips. And diversify – don’t put all in one app. As @CoinsauceCrypto on X said: “The court confirmed India’s jurisdiction… and called for stronger regulatory oversight.” Stay safe, trade smart.