The Madras High Court has delivered a landmark ruling recognizing cryptocurrency as "property" under Indian law, a decision that could reshape the legal and regulatory landscape for digital assets in the country. In a judgment dated October 25, 2025, Justice N. Anand Venkatesh affirmed that cryptocurrencies, while intangible and not legal tender, qualify as assets capable of ownership, possession, and trust. This classification aligns with global precedents and reinforces the Income Tax Act's treatment of virtual digital assets (VDAs) as taxable entities.
The ruling emerged from a case involving an investor seeking to recover 3,532.30 XRPXRP-- tokens held on the WazirX platform after a 2024 cyberattack froze her assets. The court barred WazirX from redistributing the XRP to cover losses from the hack, emphasizing that the tokens constituted distinct property rights rather than unsecured claims. "Cryptocurrency is not a tangible property nor a currency," Justice Venkatesh wrote, "but it is property capable of being enjoyed and possessed in a beneficial form." The decision also cited international rulings, including New Zealand's Ruscoe v. Cryptopia and the U.S. SEC v. Ripple Labs, to underscore the growing consensus on crypto's legal status, according to an ICOBench article.
The judgment's implications extend beyond the WazirX case, offering clarity on how Indian courts may intervene in disputes involving digital assets. The court asserted jurisdiction over the XRP holdings, noting that the investor had purchased the tokens using funds from a Kotak Mahindra Bank account in Chennai. This territorial nexus, combined with the Indian arm of WazirX (Zanmai Labs Pvt. Ltd.) being a registered entity under the Financial Intelligence Unit (FIU) India, strengthened the domestic legal connection. The ruling also highlighted that crypto exchanges hold user assets in trust, imposing fiduciary duties on platforms like WazirX. "The user's investment is converted into crypto, which can be traded, stored, and sold," the court stated, "carrying a definite proprietary character."
The decision aligns with recent judicial trends in India, where courts have increasingly recognized crypto's economic value. For instance, the Bombay High Court previously rejected similar "socialization of losses" proposals by exchanges, reinforcing user rights, as reported by Yahoo Finance. Meanwhile, the Madras High Court's stance could pressure lawmakers to formalize regulations, as India remains one of the few major economies without comprehensive crypto legislation. The government currently taxes VDAs at 30% but lacks a framework for consumer protection, inheritance, or insolvency.
The ruling has sparked mixed reactions within the crypto community. While investors applaud the affirmation of ownership rights, legal experts caution that treating all tokens as property could complicate regulatory clarity. For example, governance tokens like UNIUNI--, which grant voting rights in decentralized protocols, may not fit neatly into this category, according to Coinotag. Additionally, the decision's emphasis on trust-based custody could lead to stricter governance standards for exchanges, akin to those applied to banks.
The Madras High Court's judgment also signals India's potential to become a hub for crypto innovation while balancing consumer safeguards. By referencing global precedents and emphasizing India's unique opportunity to "design a regulatory regime that encourages innovation while protecting consumers," Justice Venkatesh has set a benchmark for future rulings, as noted in The Economic Times. As the WazirX case proceeds through arbitration, the final outcome may further define the scope of user protections and the responsibilities of crypto platforms.
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