Digital Property, Tangible Rights: Court Recognizes Legal Ownership of Cryptocurrency

The Madras High Court has issued a significant judgment, officially classifying cryptocurrency as property under Indian legislation—a move that could have far-reaching effects on the country's digital asset laws and regulations. Justice N. Anand Venkatesh stated that, despite their intangible nature, cryptocurrencies meet the criteria for property, meaning they can be owned, transferred, and managed in trust, as the

determined. This verdict stemmed from a dispute related to the July 2024 WazirX exchange breach, where a user’s 3,532.30 tokens—unaffected by the $230 million Ethereum theft—were shielded from being redistributed under the platform’s “socialization of losses” policy, as the concluded. The court highlighted that cryptocurrencies are distinct, transferable, and controlled by private keys, fitting the definition of “virtual digital assets” in India’s Income Tax Act, as also mentioned in the crypto.news article.

This ruling affirms the court’s authority over crypto assets held within India, dismissing WazirX’s claim that Singapore’s arbitration rules should prevent Indian courts from intervening. Justice Venkatesh referenced a 2021 Supreme Court case confirming that assets situated in India are subject to local judicial protection, as reported by crypto.news. The judgment also made clear that tokens like XRP, which differ from the stolen ERC-20 tokens, are separate assets, thereby rejecting arguments that the investor should bear losses from the hack, as outlined in the WazirX decision coverage.

Legal professionals and industry stakeholders have praised the verdict as a crucial development for India’s crypto legal framework. Sudhakar Lakshmanaraja from Digital South Trust commented that the decision enhances consumer rights and sets the stage for more robust regulations, according to Yahoo Finance’s report on the WazirX case. Giottus CEO Vikram Subburaj described the ruling as an indication that India’s technology sector will be held to “rigorous standards of oversight and protection.” The court’s reference to international cases from New Zealand, the UK, Singapore, and the U.S. further supports the global movement toward recognizing crypto as property, as noted in the crypto.news analysis.

This decision has major consequences for taxation, inheritance, and contract enforcement involving digital currencies. By establishing crypto as property, the court has created a basis for settling ownership and custody disputes, especially in scenarios where exchanges act as trustees, as highlighted in the crypto.news report. Nevertheless, India’s regulatory environment remains inconsistent, with heavy taxation but little direction on investor protections or asset security. The judgment now urges lawmakers to develop a comprehensive legal framework that encourages innovation while safeguarding consumers, according to Decrypt.

As the digital asset sector continues to grow, the Madras High Court’s ruling stands as a turning point, securing the rights of crypto owners and setting a standard for future legal cases. With the judiciary increasingly filling regulatory voids, India’s strategy for crypto oversight appears set for significant change.