Madras High Court Landmark Ruling: Cryptocurrency Recognized as Legal Property Under Indian Law

The Madras High Court has issued a landmark ruling declaring cryptocurrency as "property" under Indian law, establishing it as an asset that can be owned, enjoyed, and held in trust.

"Cryptocurrency undoubtedly constitutes property. While it is neither tangible property nor currency, it remains property capable of being enjoyed and possessed in a beneficial form. It can be held in trust," stated Justice N Anand Venkatesh, presiding over a single-judge Bench.

In delivering this judgment, the Madras High Court referenced Supreme Court decisions from Ahmed GH Ariff vs CWT and Jilubhai Nanbhai Khachar vs State of Gujarat cases to broaden the definition of "property" within Indian legal framework.

Justice Venkatesh elaborated: "Property in legal terms represents an aggregate of rights guaranteed and protected by law. It encompasses every form of valuable right and interest... anything possessing exchangeable value or contributing to wealth, estate, or status."

The court additionally noted that cryptocurrency falls within the "virtual digital asset" definition under Section 2(47A) of the Income Tax Act, 1961, and is not considered a speculative transaction.

This ruling emerged from a case where an applicant sought to protect 3,532.30 XRP coins held on the WazirX platform that had been frozen following a cyberattack in 2024.

The Madras High Court recognized these holdings as the applicant's legitimate property and restricted any interference pending arbitration proceedings.

Justice Venkatesh observed that despite cryptocurrencies being "streams of 1s and 0s residing in a blockchain managed by the cryptocurrency issuer," they constitute an asset "capable of being owned, transferred and stored."

"Cryptocurrency is not a currency in the strict sense, nor can we automatically conclude that a digital asset is an asset in the strict sense," remarked the Madras High Court, adding that "India has the opportunity to create a regulatory framework that fosters innovation while protecting consumers and maintaining financial stability."

The judgment referenced a 2020 New Zealand High Court decision in Ruscoe vs. Cryptopia Ltd (in Liquidation), which determined cryptocurrencies to be a "type of intangible property" capable of being held in trust.

"Though merely a series of 1s and 0s, it represents more than just information," quoted the Madras High Court.

This order aligns with similar judicial recognitions globally—the UK High Court in AA vs. Persons Unknown (2019), Singapore High Court in ByBit Fintech Ltd v. Ho Kai Xin (2023), and US federal courts in SEC vs. Ripple Labs (2023) have all classified crypto tokens as property or commodities.

With this judgment, the Madras High Court provides essential clarity regarding cryptocurrencies' legal status in India, potentially impacting taxation, inheritance, insolvency, and contractual enforcement involving digital assets.