In a significant legal milestone, the Madras High Court has recognised cryptocurrency as a form of property under Indian law. The ruling, delivered on October 25, 2025, by Justice N. Anand Venkatesh in the Rhutikumari vs Zanmai Labs Pvt. Ltd., marks the first time an Indian court has explicitly classified Virtual Digital Assets (VDAs) as property capable of ownership and trust.
The case originated when the petitioner, Rhutikumari, sought an injunction under Section 9 of the Arbitration and Conciliation Act, 1996, to prevent Zanmai Labs, the operator of the WazirX exchange, from interfering with her 3,532 XRP tokens. Her holdings had been frozen after a large-scale cyberattack on one of WazirX’s wallets and a subsequent restructuring process initiated in Singapore by its parent company, Zettai.
During the proceedings, Justice Venkatesh examined global jurisprudence, referring to cases from the UK, New Zealand, and Singapore to illustrate how courts worldwide are treating digital assets. Furthermore, he relied on Indian Supreme Court precedents to reason that cryptocurrencies, though intangible, clearly possess attributes of property such as the capability of “being enjoyed and possessed (in a beneficial form)” and “being held in trust”.
Ultimately, the court ruled in the petitioner’s favour and granted interim protection. It directed Zanmai Labs to either furnish a bank guarantee of Rs 9.56 lakh or deposit the same amount in escrow until arbitration concludes. Moreover, the judgement emphasised that exchanges hold cryptocurrency assets in fiduciary trust for users, strengthening investor rights and clarifying their legal standing in India’s evolving digital asset landscape.
The Court On Defining Cryptocurrency
The Madras High Court held that cryptocurrency qualifies as property under Indian law, explaining that it possesses characteristics of ownership, control, and enjoyment despite being intangible. Justice N. Anand Venkatesh stated that although cryptocurrency “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)” and “capable of being held in trust”.
Moreover, the court reasoned that digital assets such as cryptocurrencies exist as entries on a blockchain ledger, identifiable and transferable like other forms of property. The judge noted that holders own each unit through private and public keys stored in digital wallets, enabling them to control, trade, or transfer it securely. Therefore, the court concluded that cryptocurrency qualifies as property because owners can exclusively possess, use, and transfer it.
Additionally, the court emphasised that Indian law treats crypto assets as “virtual digital assets” rather than speculative instruments. It further cited Section 2(47A) of the Income Tax Act, 1961, which recognises such assets as a distinct class that people can store, trade, and sell. Consequently, the court stated that investment in cryptocurrency involves the conversion of Indian currency into a digital form that retains value and can generate returns, clearly distinguishing it from gambling or speculation.
In conclusion, the court interpreted cryptocurrency as property rather than a mere medium of exchange, thereby extending legal protection to holders and reaffirming that existing property rights allow them to hold, safeguard, and preserve their digital assets in trust.
Implications Of The Judgment
Purushottam Anand, an advocate and founder of Crypto Legal, calls the decision a welcome development, saying it provided “much-needed clarity on the legal status and characterisation of VDAs in India”. Anand further explains, “The court has implicitly confirmed the legality of trading and other activities in VDA, addressing a long-standing grey area for investors and other market participants.”
Furthermore, he points to the “in trust” definition given by the court, pointing out that it allows “investors to enforce enhanced accountability for VDA exchanges and custody service providers where fiduciary-like duties are evident”. He adds that while the judgement is not binding on other high courts, it “carries strong persuasive value and is likely to influence future rulings”.
Moreover, on the implications for Indian WazirX users, Anand notes, “the Court has provided interim relief by ordering Zenmai Labs (the Indian entity of Wazirx) to provide a bank guarantee equivalent to the value of VDAs to the applicant but has left the broader question of whether the order of the Singapore Court will be binding on the applicant to be adjudicated by the arbitration tribunal.”
Judicial Precedents Used
Justice N. Anand Venkatesh drew on a series of domestic and international judicial precedents to establish that cryptocurrency possesses the characteristics of property. The Madras High Court referred to rulings from the United Kingdom, Singapore, New Zealand, and India to explain how courts worldwide have adapted traditional property law to the digital era.
The court cited the High Court of England and Wales’ 2019 judgement in AA vs Persons Unknown, which held that Bitcoin constitutes a form of property that people can own and transfer.
Similarly, the court noted that Singaporean courts in Janesh vs Unknown Person (2022) and ByBit Fintech Ltd vs Ho Kai Xin (2023) affirmed that parties can define, identify, and store digital tokens such as NFTs and stablecoins like any other property. These examples demonstrated that digital assets have an identifiable value and can exist independently of traditional currency systems, observed the Judges.
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Furthermore, the court referred to the New Zealand High Court’s 2020 ruling in Ruscoe vs Cryptopia Ltd (in Liquidation), which directly held that cryptocurrencies constitute intangible property that people can hold on trust. The Madras High Court relied on this reasoning to conclude that crypto assets, though composed of “streams of 1s and 0s”, represent more than mere information because they confer ownership and control.
Additionally, Justice Venkatesh invoked Indian Supreme Court rulings such as Ahmed G.H. Ariff vs CWT (1969) and Jilubhai Nanbhai Khachar vs State of Gujarat (1995) to define “property” broadly as anything capable of possession, enjoyment, and transfer. Applying these principles, the court concluded that cryptocurrency, though virtual, fits within this legal framework.
Cryptocurrency Regulation In India
India’s approach to cryptocurrency regulation has evolved significantly over the past decade. In April 2018, the Reserve Bank of India (RBI) issued a directive directing all regulated entities to stop providing banking services to individuals and businesses dealing in virtual currencies. This move effectively cut off crypto exchanges from formal financial channels and was widely seen as a de facto ban.
However, in March 2020, the Supreme Court overturned the RBI circular after a petition was filed by several cryptocurrency exchanges and was later joined by the Internet and Mobile Association of India. The Court held that while the RBI had the power to regulate risks associated with cryptocurrencies, its blanket restriction on banking access was disproportionate. This decision reopened India’s crypto markets and allowed exchanges to resume operations, though regulatory uncertainty persisted.
Subsequently, the government introduced a taxation regime through the Union Budget in 2022, classifying cryptocurrencies and similar instruments as “Virtual Digital Assets” under Section 2(47A) of the Income Tax Act, 1961. Furthermore, the Finance Act imposed a 30% tax on gains from crypto transactions and a 1% tax deducted at source (TDS) on transfers, signalling official recognition for taxation purposes even without a dedicated regulatory law.
Today, India continues to treat cryptocurrencies as virtual digital assets rather than legal tender, regulating them primarily through taxation and anti-money laundering provisions. However, a comprehensive law is still lacking.
Why This Matters
The Madras High Court’s decision goes beyond a single investor’s dispute; it sets a foundational precedent for how India’s courts view digital ownership in an increasingly technology-driven economy. By classifying cryptocurrency as property, the judgement effectively brings digital assets under the ambit of existing property and trust laws, allowing investors to claim ownership rights that were previously undefined in Indian jurisprudence.
This matters because, until now, India’s regulators have left cryptocurrency users in a legal grey area where they could lose assets worth billions without clear legal recourse. With this ruling, the court established that the law protects digital tokens like any other form of property, giving users a tangible pathway to seek judicial protection against fraud, exchange failures, or cyberattacks.
Moreover, the recognition of cryptocurrency as property also sets a precedent for how regulators, tax authorities, and enforcement agencies may approach future cases. It strengthens the framework laid out by the Income Tax Act, which classifies crypto as “virtual digital assets”, and could influence how future legislation defines ownership and liability in digital asset transactions.
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