“There can be no doubt that cryptocurrency is a property. It is not a tangible property nor is it a currency. However, it is a property that can be enjoyed and possessed (in a beneficial form). It is capable of being held in trust,” a single-judge bench of Justice N. Anand Venkatesh said.
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While passing this order, the Court drew support from apex court judgments in Ahmed GH Ariff v CWT and Jilubhai Nanbhai Khachar v State of Gujarat to expand the meaning of ‘property’ under Indian law, an IANS report said.
“Property in legal sense means a set of rights guaranteed and protected by law. It extends to valuable rights and interests of every kind…anything that has a convertible value or that constitutes wealth, estate or status,” Justice Venkatesh quoted.
Justice N. Anand Venkatesh also stated that cryptocurrency falls within the definition of a “virtual digital asset” under Section 2(47A) of the Income Tax Act, 1961, and is not treated as a speculative transaction.
The ruling was made in response to a plea from an investor demanding the release of her 3,532.30 XRP tokens on the WazirX platform, which were frozen after a cyberattack in 2024.
The Madras High Court recognized the applicant’s assets as its own, limiting interference pending the arbitration proceedings.
Judge Venkatesh noted that cryptocurrencies are “streams of 1s and 0s that reside on a blockchain controlled by the cryptocurrency issuer, but they constitute an asset that can be “owned, transferred and stored.”
“Cryptocurrency is not a currency in strict sense, nor can we come to the conclusion that a digital asset is strictly an asset,” the Madras High Court observed. It further added that “India has the opportunity to design a regulatory regime that encourages innovation while protecting consumers and maintaining financial stability.”
Judge Venkatesh mentioned a 2020 decision of the New Zealand Supreme Court in Ruscoe v. Cryptopia Ltd (in liquidation), in which the court ruled that cryptocurrencies are a “kind of intangible property” that can be held in trust.
“Though it is just a series of ones and zeros, it is more than mere information,” the Madras High Court further stated.
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The order comes amid similar judicial recognition in several jurisdictions: the UK Supreme Court in AA v. Persons Unknown (2019), the Singapore Supreme Court in ByBit Fintech Ltd v. Ho Kai Xin (2023), and the US federal courts in SEC v. Ripple Labs (2023), where they have all treated crypto tokens as property or commodities.
This ruling by the Madras High Court has provided much-needed clarity on the legal status of cryptocurrencies in the country, which could have major implications for taxation, inheritance, insolvency and contract enforcement related to digital assets.
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