Crypto Is ‘Property’ in India, Not Just Code: Madras HC
Court protected investor’s frozen XRP holdings; said digital assets can be held in trust under Indian law
The Madras High Court holds crypto 'property'; protects WazirX investor's XRP assets
In a significant judgment touching on the status of cryptocurrency in Indian law, the Madras High Court has held that digital assets such as cryptocurrency qualify as “property” capable of being held in trust and protected under Indian law regime.
The bench of Justice N. Anand Venkatesh held that an investor’s digital holdings on the WazirX exchange could not be arbitrarily frozen following a cyberattack that affected unrelated digital assets.
Rhutikumari, an investor from Chennai, sought protection for her 3,532 XRP coins stored on the WazirX exchange. In January 2024, she invested Rs. 1,98,516 on WazirX, which is run by Zanmai Labs Pvt. Ltd. By January 2025, the value of her XRP coins had risen to Rs. 9,55,148.20. However, in July 2025, the company announced that one of its cold wallets had been subjected to a cyberattack, leading to a loss of Ethereum-based ERC-20 tokens worth about USD 230 million. Following this, the company froze user accounts, including Rhutikumari’s.
Rhutikumari approached the Madras High Court under Section 9 of the Arbitration and Conciliation Act, seeking an injunction against WazirX and its directors from redistributing or reallocating her digital assets.
WazirX, represented by Senior Advocate Satish Parasaran, argued that the matter was not maintainable in India as the user agreement fixed Singapore as the seat of arbitration under the Singapore International Arbitration Centre (SIAC) rules. It was further contended that Zanmai Labs was only a distributor in India and had no control over users’ digital wallets, which were operated by foreign entities, first Binance, and later Zettai Pte. Ltd., Singapore. The company also informed the court that the Singapore High Court had approved a scheme of arrangement on October 13, 2025, for the restructuring of assets following the cyberattack, and that the applicant’s claims would be settled under that process.
Rejecting the preliminary objection, the court held that since the applicant’s investment originated from her Indian bank account and the WazirX platform was accessed and operated in India, a part of the cause of action arose within the jurisdiction of the Madras High Court. Relying on the Supreme Court’s judgment in PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd., Justice Venkatesh held that even where arbitration is seated abroad, Indian courts may grant interim protection under Section 9 where assets are located in India.
Court also noted that proceedings were pending before the Singapore High Court when the application was filed and that the scheme of arrangement had subsequently been finalised there on October 13, 2025, under the Singapore Companies Act, making it binding on Zettai and its creditors. However, Justice Venkatesh observed that the applicant’s holdings in India were independent of the assets under dispute in Singapore and that the restructuring process there could not automatically affect Indian investors like Rhutikumari.
Court undertook an extensive analysis of how courts worldwide have interpreted the legal nature of cryptocurrency, citing precedents from the UK, Singapore, the US, and New Zealand.
Referring to Ruscoe v. Cryptopia Ltd. (in Liquidation), the court quoted the New Zealand High Court’s observation that digital tokens “are a type of intangible property … more than mere information … capable of being held on trust".
“Judging from the above two decisions, there can be no doubt that ‘crypto currency’ is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust," Justice Venkatesh held.
Court observed that Indian law recognises cryptocurrencies as “virtual digital assets” under Section 2(47A) of the Income Tax Act, 1961. It further recorded that WazirX, operated by Zanmai Labs, is registered as a “reporting entity” with the Financial Intelligence Unit (FIU) of India, unlike Binance and Zettai, which are not registered and therefore unauthorized to operate or manage cryptocurrency transactions in India.
Moreover, Justice Venkatesh found that the cyberattack had targeted ERC-20 tokens, not XRP, which the applicant owned. Thus, the freezing of her account was not legally justified. Court rejected the argument that user assets could be “socialised”, meaning losses from stolen assets could be distributed among all users.
Referring to the Bombay High Court’s judgment in Zanmai Labs Pvt. Ltd. v. Bitcipher Labs LLP (October 7, 2025), Justice Venkatesh reiterated that such a practice was “untenable and beyond the contractual framework".
“To use those assets not belonging to Zanmai, and that too by Zettai, and to utilize them for covering losses attributable to other users is not something even on the face of it lends itself to a reasonable acceptance,” the Madras High Court said, quoting the Bombay High Court’s reasoning with approval.
Recognising Rhutikumari’s XRP holdings as her personal property, the court directed Zanmai Labs Pvt. Ltd. to furnish a bank guarantee for Rs. 9,56,000 in her favour, to be renewed periodically until the conclusion of the arbitral proceedings.
Court clarified that its interim order would remain in effect until the arbitral tribunal was constituted and passed its own directions. The matter, therefore, will now proceed before the arbitral forum as per the dispute resolution clause in the WazirX user agreement.
Case Title: Rhutikumari vs. Zanmai Labs Pvt. Ltd and Others
Order Date: October 25, 2025
Bench: Justice N Anand Venkatesh