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Chennai: In a significant order, Madras high court has held that cryptocurrency can be treated as a property, which is capable of being enjoyed and possessed (in a beneficial form) and is capable of being held in trust.“In the Indian law regime, cryptocurrency is treated as a virtual digital asset, and it is not treated as a speculative transaction. This is in view of the fact that the investment made by the user is converted into cryptocurrency, which is capable of being stored, traded, and sold. Cryptocurrency is termed as a virtual digital asset and is governed under Section 2(47A) of the Income Tax Act,” Justice N Anand Venkatesh said on Friday.The court passed the order on a plea moved by Rhutikumari to restrain Zanmai Labs Pvt Ltd and its directors from interfering with the portfolio holding of the applicant to the tune of 3,532.30 XRP coins on the WazirX platform, either by redistribution, apportionment, or reallocation.Opposing the plea, WazirX contended that it is not the owner of crypto wallets. The platform was affected by a massive hack, and user withdrawals were halted under a court-approved restructuring scheme in Singapore. Under that scheme, all users (including the applicant) would receive pro-rata compensation through a three-step process supervised by the Singapore high court. Hence, the Madras high court lacked the jurisdiction, it added.Recording the submissions, the court rejected the argument that it lacks jurisdiction on the ground that the arbitration was seated in Singapore. The court observed that the applicant transferred funds from her bank account in Chennai to purchase crypto assets and that she accessed the platform from within India. On that basis, a part of the cause of action was held to have arisen within the territorial jurisdiction of the Madras high court and granted an interim injunction against Zanmai Labs and its directors from interfering with or reallocating the applicant’s 3,532.30 XRP coins.
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