In a landmark ruling, the Madras High Court has recognized cryptocurrencies, including XRP, as property under Indian law.
The judgment, issued by Justice N. Anand Venkatesh, establishes that digital assets possess the essential characteristics of property: they are identifiable, transferable, and controllable through private keys.
The Case Behind the Judgment
The decision resulted from a lawsuit related to the 2024 cyberattack on the crypto exchange WazirX. The plaintiff, Rhutikumari, requested legal protection for 3,532.30 XRP tokens affected during the incident. Although some Ethereum-based assets were stolen in the hack, Rhutikumari’s XRP holdings remained recoverable.
The court ordered WazirX not to interfere with Rhutikumari’s XRP holdings until arbitration concludes.
Justice Venkatesh emphasized that cryptocurrency, though intangible, can still be “owned and enjoyed beneficially,” thereby equating it with property rights under civil law.
Legal Basis and Definition
The judgment draws on Section 2(47A) of the Income Tax Act, 1961, which identifies cryptocurrencies as Virtual Digital Assets (VDA).
Justice Venkatesh stated that such assets are uniquely identifiable and managed via private keys. Therefore, they fulfill the requirements of personal property under Indian law. Consequently, this interpretation grants holders enforceable ownership rights and protection against unauthorized interference.
Citing Global Legal Precedents
Justice Venkatesh referenced international rulings that similarly recognized crypto assets as property. Among them were:
- Ruscoe v. Cryptopia (New Zealand, 2020)
- AA v. Persons Unknown (United Kingdom, 2019)
- SEC v. Ripple Labs (United States, 2023)
By aligning with these global cases, the court positioned India within an emerging international legal consensus that digital assets carry property rights, even though they exist only in digital form.
Ultimately, this paves the way for future laws concerning inheritance, custodial responsibility, and taxation of digital assets, offering certainty to investors and exchanges alike.
Call for a Balanced Regulatory Framework
Justice Venkatesh urged lawmakers to craft a balanced crypto regulation that secures consumer rights while encouraging innovation. He noted that, with this ruling, India now has the opportunity to develop a system that protects investors and promotes technological growth without imposing undue constraints on the digital economy.
Though cryptocurrencies remain outside the definition of legal tender, this ruling confirms their legitimate status as property. The decision bolsters confidence among crypto investors, developers, and startups in India’s rapidly growing Web3 sector.
By formally recognizing digital assets within the legal framework, the Madras High Court has established a critical precedent for digital ownership and investor protection in India’s evolving financial landscape.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
