India’s Madras High Court Declares Cryptocurrency Legal Property in Landmark Ruling: A New Era for Digital Asset Rights
Introduction: A Watershed Moment for Crypto in India
In a historic judgment with far-reaching implications, the Madras High Court has officially declared cryptocurrencies legal property under Indian law. The ruling, delivered by Justice N. Anand Venkatesh, affirms that digital assets can be owned, held in trust, and protected as property—a pivotal development that strengthens investor rights and clarifies the legal standing of cryptocurrencies in one of the world’s fastest-growing digital economies. The case stemmed from a dispute involving WazirX, one of India’s largest cryptocurrency exchanges, and an investor whose XRP holdings were frozen following a major security breach. By rejecting the exchange’s proposed “socialisation of losses” policy and asserting Indian jurisdiction over the matter, the Court has set a powerful precedent for accountability, governance, and ownership in India’s Web3 landscape.
Cryptocurrency in India Now Recognised as Property
The core of the Madras High Court’s ruling lies in its clear classification of cryptocurrencies as property. Justice Venkatesh emphasized that digital assets, while intangible, exhibit all essential characteristics of property: they are identifiable, transferable, and subject to exclusive control via private keys. As he stated in the judgment: “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.”
This interpretation marks a significant departure from earlier ambiguity surrounding the legal status of cryptocurrencies in India. While the Reserve Bank of India (RBI) had previously attempted to ban banking services for crypto businesses—a move overturned by the Supreme Court in 2020—the regulatory landscape has remained fragmented. The Madras High Court’s decision now provides a foundational legal principle: cryptocurrencies are assets entitled to protection under Indian law.
The ruling emerged from a petition filed by an investor who held 3,532.30 XRP coins on WazirX. In July 2024, the exchange suffered a $234 million hack involving Ethereum and ERC-20 tokens. Although the investor’s XRP was unaffected, WazirX sought to redistribute all user funds under its “socialisation of losses” plan—a mechanism that would have diluted individual holdings to cover exchange-wide losses. The Court firmly rejected this approach, affirming that each investor’s cryptocurrency constitutes individual property that cannot be appropriated or redistributed without consent.
Jurisdiction and Investor Protection: Reinforcing Domestic Oversight
A critical aspect of the Madras High Court’s ruling addressed jurisdictional authority. WazirX had argued that Singaporean arbitration rules should apply since its parent company, Zettai Pte Ltd, is based in Singapore. However, Justice Venkatesh dismissed this claim, citing the Supreme Court’s 2021 decision in PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd, which affirmed Indian courts’ jurisdiction over assets located within the country.
The Court noted that the investor conducted transactions from Chennai using an Indian bank account, firmly placing the case under Indian legal purview. This finding reinforces that cryptocurrency exchanges operating in India—even those with foreign parent entities—are subject to domestic laws and consumer protection standards.
Additionally, the judgment highlighted the regulatory standing of Zanmai Labs Pvt Ltd, the entity operating WazirX in India. Unlike its parent company or Binance, Zanmai Labs is registered with India’s Financial Intelligence Unit (FIU), underscoring its obligation to comply with local anti-money laundering and know-your-customer (KYC) requirements. By affirming Indian jurisdiction, the Court has strengthened the framework for holding domestic crypto businesses accountable to Indian users and regulators.
Strengthening Web3 Governance: A Call for Higher Standards
Beyond resolving the immediate dispute, Justice Venkatesh used the platform to advocate for robust governance within the cryptocurrency sector. He urged exchanges to adopt stricter operational standards, including:
- Maintaining separate accounts for client funds
- Conducting regular independent audits
- Implementing rigorous KYC and anti-money laundering controls
These recommendations align with global best practices and respond to growing concerns over exchange solvency and transparency following incidents such as the FTX collapse in 2022. The Court’s emphasis on corporate governance signals to Indian exchanges that they must prioritize user protection to foster trust and sustainability in the digital asset ecosystem.
Legal experts have hailed the judgment as a milestone in “crypto-jurisprudence.” Vikram Subburaj, CEO of Indian exchange Giottus, described it as a foundational moment that clarifies expectations for exchanges, users, and regulators alike. By establishing clear guidelines for custodianship and accountability, the ruling encourages responsible innovation while mitigating risks associated with asset mismanagement.
A Foundation for India’s Crypto Future
The Madras High Court’s decision arrives at a crucial juncture for India’s cryptocurrency industry. While the country has enforced strict tax policies on digital assets—including a 30% capital gains tax and 1% TDS (tax deducted at source) since 2022—investor protections have lagged behind. The property classification fills this gap, providing a legal basis for users to assert ownership rights and seek judicial recourse in cases of misuse or loss.
Justice Venkatesh aptly noted that courts now serve as the “central stage where the future of digital value is debated.” His ruling not only safeguards individual investors but also contributes to a more predictable regulatory environment—a key factor for institutional adoption and long-term growth.
Comparatively, this judgment echoes progressive rulings in other jurisdictions, such as the Singapore International Commercial Court’s 2020 decision recognizing cryptocurrencies as property. However, its impact is uniquely significant in India, where regulatory uncertainty has persisted despite high crypto adoption rates. By affirming that cryptocurrencies are protected assets, the Madras High Court has laid groundwork for future legislation and policy-making.
Conclusion: Clarifying Ownership and Responsibility in India’s Digital Economy
The Madras High Court’s landmark ruling represents a turning point for cryptocurrency regulation in India. By declaring digital assets legal property, affirming domestic jurisdiction, and calling for enhanced governance standards, the judgment strengthens both investor rights and industry accountability. It signals that cryptocurrencies—whether Bitcoin, XRP, or Ethereum—are not merely speculative instruments but recognized assets under Indian law.
For market participants, the decision underscores the importance of using compliant exchanges, understanding custodial practices, and staying informed about regulatory developments. As India continues to shape its digital asset framework, this ruling provides much-needed clarity and confidence for users, builders, and investors alike.
Looking ahead, stakeholders should monitor how this precedent influences pending regulatory proposals, including potential licensing frameworks for exchanges and broader cryptocurrency legislation. With courts now actively defining the boundaries of digital ownership, India’s crypto ecosystem is poised for more structured and secure growth in the years to come.