In early 2025, a crypto investor named Rhutikumari filed a case against Zanmai Labs Pvt. Ltd., the parent company of WazirX—one of India’s largest cryptocurrency exchanges. She reportedly lost nearly $20 million worth of Ethereum tokens in a cyber theft. WazirX argued that it was not liable since the stolen assets were not directly under its custodial control.
The Madras High Court observed that cryptocurrencies function like property because they can be owned, transferred, and held in trust—similar to gold, shares, or other valuable assets.
The court clarified that while cryptocurrencies are not legal tender in India, they still qualify as digital property under Indian law. Therefore, they can be protected and recovered through legal proceedings in cases of theft, fraud, or contractual disputes.
For instance, if an individual purchases Bitcoin, it becomes their digital property, even though it lacks physical existence.
India has yet to enact a comprehensive Cryptocurrency Regulation Act, leaving the sector in a legal grey area. However, several regulatory steps have been taken to provide partial oversight:
• In 2020, the Supreme Court overturned the Reserve Bank of India’s (RBI) ban on cryptocurrency trading.
• The Finance Act, 2022 introduced taxation provisions — a 30% tax on profits and 1% TDS on each transaction.
• Major exchanges such as WazirX and CoinDCX are monitored under the Prevention of Money Laundering Act (PMLA) to prevent illicit use of digital assets.
For example, if an investor earns ₹1 lakh from Bitcoin trading, ₹30,000 would be payable as tax, and ₹1,000 would be deducted as TDS at the time of sale.
The judgment provides stronger legal backing for cryptocurrency investors in India. Since crypto assets are now recognized as property, investors can claim their holdings in cases of cyber theft, fraud, insolvency, or inheritance disputes.
They can also approach courts for remedies such as injunctions, recovery orders, or inclusion of crypto assets in estate settlements, similar to other forms of movable property.
The ruling increases pressure on policymakers to define the legal and regulatory status of digital assets more clearly. It could pave the way for a dedicated framework covering ownership rights, taxation norms, and integration with the banking system.
Experts believe India may gradually move toward a structured regulatory regime inspired by global models adopted in countries like Singapore, Japan, and the United Kingdom.
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