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In a significant ruling the Madras High Court has recognised cryptocurrency as a “property” under Indian law that is capable of being possessed and and held in trust, pavign the way for Indian courts to intervene in crypto disputes, according to experts.
“There can be no doubt that “crypto currency” 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 (in a beneficial form). It is capable of being held in trust,” said Justice N. Anand Venkatesh in ruling.
The judgement came while the court was hearing a petition filed by a crypto investor whose XRP holdings on crypto exchange WazirX were frozen after a 2024 cyberattack. She had contended that assets held by her were distinct from the Ethereum tokens that had been stolen in the hack and was seeking an injuction to prevent WazirX from redistributing her portfolio.
The order made a buzz in the Indian crypto sector for three reasons: recognition of crypto as owned and trusted “property,” clarity on Indian courts’ ability to intervene in digital asset disputes, despite offshore arbitration and assertion of investor protection by stating that foreign insolvency or restructuring schemes cannot override a user’s rights over self-owned digital assets.
Moreover, the judgement has given a renewed hope to the investors to file similar claim in Indian courts, said Rashmi Deshpande, a technology lawyer helping many investors in their claim against WazirX in Singapore and India courts. The Singapore High Court did not consider WazirX the custodian of the cryptocurrencies, which made it difficult for investors to challenge the restructuring scheme suggested by the exchange.
“By emphasising that tokens are ‘capable of being enjoyed and possessed… held in trust’ and tying the reasoning to the Income Tax Act’s definition of virtual digital assets, the Court has provided a much‐needed foundation for investor rights, custodial accountability and regulatory certainty,” said Aishwary Gupta, Global Head of Payments at Polygon Labs, adding that the decision signals a meaningful shift toward treating crypto-assets as bona fide proprietary rights increasing investor confidence.
Crypto expert Sharat Chandra in a LinkedIn post, called the court order ”a defining moment” for crypto jurisprudence in India. He pointed out that the ruling has held that Indian courts retain jurisdiction under Section 9 of the Arbitration and Conciliation Act, even in foreign arbitration cases if the assets and investor are located in India. The investment also originated from an Indian bank account, and the effects of the platform’s freezing of assets were felt domestically.
“This sets a crucial jurisdictional precedent for Web3 platforms operating across borders but serving Indian users,” said Chandra.
The order also rejected the “Socialization of Losses” scheme under which the loss would be redistributed across all users through a Singapore Court-approved restructuring.
“To use those assets not belonging to Zanmai, and that too by Zettai, to cover losses attributable to other users, is not something even on the face of it lends itself to reasonable acceptance,” said the court. This means that user assets are held in trust and cannot be reallocated to cover another entity’s operational losses.
According to Chandra, this principle effectively blocks offshore entities from imposing foreign insolvency or restructuring schemes on Indian users, especially when assets or wallets are within Indian jurisdiction.
Published on October 26, 2025
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