177% up to 5BTC + 77 Free Spins!
New players only. Exclusive Welcome Bonus of 177% + 77 Free Spins
The legal status of cryptocurrency in India took an important turn after the Madras High Court confirmed that digital tokens can be treated as property under Indian law. The ruling arose from a case involving frozen funds on the WazirX exchange following a major cyberattack.
Good to Know
Justice N Anand Venkatesh ruled that cryptocurrency meets the criteria required to classify it as property. The Court stated that crypto assets can be controlled, transferred, stored, and held for benefit, similar to other forms of intangible property.
The judge wrote:
“There can be no doubt that cryptocurrency is a property. It is not a tangible property, nor is it a currency. 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 case centered on a Chennai investor who purchased 3532.30 XRP coins valued at around Rs 1,98,516. These funds were frozen when WazirX halted activity after a July cyberattack that targeted Ethereum and ERC-20 tokens worth nearly $230 million.
Zanmai Labs, the operator of WazirX, argued that all users should share responsibility for the losses. The Court rejected this argument.
Justice Venkatesh noted that the investor held XRP, while the hack involved ERC-20 tokens, which are different digital assets and were not part of the applicant’s holdings.
“What were held by the applicant were 3532.30 XRP coins. What were subjected to cyber attack were ERC-20 coins, which are completely different cryptocurrencies,” the Court stated.
The ruling reinforces the principle that platforms must safeguard user holdings and cannot transfer risk from one asset class to another.
The Court also addressed arguments related to international arbitration. Zanmai Labs suggested the dispute should fall under rules connected to its Singapore parent company.
Justice Venkatesh cited a Supreme Court ruling confirming that Indian courts hold authority over assets located within India, especially when transactions are conducted using Indian banking channels.
The investor was based in Chennai and used an Indian bank account, placing the matter within the jurisdiction of the Madras High Court. Zanmai Labs is registered with India’s Financial Intelligence Unit, strengthening the domestic legal connection.
The Court stated that Web3 exchanges and service providers should adopt strong governance practices, including:
No. The Court recognized crypto as property, not currency. It can be owned and protected, but it does not function as legal tender.
It allows courts to protect crypto assets, apply trust law, and enforce rights of ownership, transfer, and recovery.
While issued by the Madras High Court, the reasoning may influence other courts until a nationwide legislative definition is enacted.
The Court dismissed the argument that the investor must share losses and emphasized platform responsibility to protect user funds.