In a landmark judgment, the Madras High Court held that cryptocurrency qualifies as “property” under Indian law. Justice N. Anand Venkatesh ruled that while crypto is intangible and not a legal currency, it is still a form of property capable of being possessed, enjoyed, and held in trust. This recognition means that digital assets can now be legally protected under property rights in India.
The petitioner, Rhutikumari, was a crypto investor whose XRP holdings on WazirX (Zanmai Labs Pvt. Ltd.) were frozen following a 2024 cyberattack. She argued that her holdings were distinct from the stolen Ethereum tokens and sought an injunction to prevent redistribution of her assets.
The Court ruled in her favour, restraining WazirX from redistributing her portfolio and rejecting the platform’s “socialisation of losses” scheme, which sought to spread losses from the hack among all users.
Recognition of Property Rights: Affirms that cryptocurrencies are legally protected property, not speculative assets beyond judicial protection.
Investor Protection: Prevents exchanges from reallocating user assets to cover operational or other users’ losses.
Custodial Accountability: Mandates that exchanges treat user assets as trust property, separate from company funds.
Jurisdictional Clarity: Confirms that Indian courts have jurisdiction under Section 9 of the Arbitration and Conciliation Act, even when foreign arbitration clauses exist, provided the investor and assets are located in India.
Section 9 empowers Indian courts to grant interim protective measures — such as injunctions — even when arbitration proceedings are conducted abroad. The ruling thus ensures that Indian investors retain legal recourse when their digital assets are frozen, misused, or mismanaged by exchanges operating under foreign jurisdictions.
Legal Certainty for Web3 and DeFi Platforms: Clarifies how Indian law applies to cross-border crypto platforms.
Foundation for Regulation: Anchors the definition of crypto as property using the Income Tax Act’s definition of Virtual Digital Assets (VDAs).
Investor Confidence Boost: Encourages legal redress for Indian investors affected by exchange failures or cyber breaches.
Limits on Foreign Restructuring Schemes: Prevents offshore insolvency or restructuring from overriding Indian investors’ ownership rights over digital assets.
The Madras High Court’s 2025 judgment in Rhutikumari vs Zanmai Labs Pvt. Ltd. marks a defining moment in India’s crypto jurisprudence. It recognizes cryptocurrency as “property” under Indian law, ensuring investor ownership, custodial accountability, and domestic jurisdiction in cross-border disputes. The verdict blocks exchanges from redistributing user assets, reinforces fiduciary responsibility, and establishes a firm legal foundation for regulating digital assets in India’s evolving financial ecosystem.
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