Cryptocurrency, the most talked about and the most controversial digital asset of recent times, is going to get a new recognition through a ruling by a high court in India.
The Madras High Court, in a landmark ruling delivered on October 24th, has said that cryptocurrency qualifies as property that can be owned, enjoyed, and even held in trust.
Justice N Anand Venkatesh clarified in the ruling that cryptocurrency, though virtual in nature, has all the features of beneficially held property, which means it can be stored, traded, sold, and inherited.
Cryptocurrency Recognized as a Virtual Digital Asset
While passing the judgment, the court also said that under Indian law, cryptocurrency is treated as a virtual digital asset (VDA) and not as a speculative instrument.
Referring to Section 2(47A) of the Income Tax Act, the judge emphasised that cryptocurrency investments are legitimate forms of digital assets capable of generating ownership benefits.
“In the Indian law regime, cryptocurrency is treated as a virtual digital asset, and it is not treated as a speculative transaction. This is in view of the fact that the investment made by the user is converted into cryptocurrency, which is capable of being stored, traded, and sold,” the court observed.
This historic ruling will pave the way for more robust legal clarity around taxation, ownership, and inheritance of digital assets in India.
The Case: Rhutikumari vs Zanmai Labs (WazirX)
The order was passed in response to a petition filed by Rhutikumari. She wanted to restrain Zanmai Labs Pvt Ltd (the parent company of WazirX) and its directors from interfering with her cryptocurrency portfolio of 3,532.30 XRP coins.
Rhutikumari alleged that the crypto exchange had either redistributed or reallocated her holdings without consent following platform disruptions.
In response, WazirX argued that it was not the owner of individual wallets and that a massive hacking incident had led to user withdrawals being paused under a court-approved restructuring plan in Singapore.
They also claimed that the Madras High Court lacked jurisdiction, because the matter was already under the Singapore High Court’s supervision.
Court Upholds Jurisdiction, Protects Investor’s Holdings
Rejecting WazirX’s argument, the Madras High Court said that the applicant’s funds originated from a bank account in Chennai and that all transactions took place while she was physically in India.
As a result, it falls within the territorial jurisdiction of the Madras High Court to a great extent.
The court also issued an interim injunction preventing Zanmai Labs and its directors from interfering with or reallocating the applicant’s 3,532.30 XRP coins.
This order protects the rights of Indian crypto investors, especially in cases involving international platforms and cross-border arbitration.
Why This Ruling Matters
The Madras High Court’s ruling could have far-reaching implications for India’s cryptocurrency landscape. The court has directly or indirectly provided legal protection and legitimacy to digital asset holders by recognising crypto as property that can be held in trust.
It has far-reaching implications in terms of future disputes over crypto ownership, asset recovery, and taxation, and it will also impact how crypto assets are treated in wills, trusts, and bankruptcy cases.
The judgment also reflects the growing understanding of the judiciary on digital assets and blockchain technology, signaling a more balanced and informed legal approach toward virtual finance in India.
Disclaimer:
This article is intended for informational and educational purposes only. It does not constitute legal or investment advice. Readers are advised to consult qualified legal or financial professionals before making any decisions related to cryptocurrency trading, investment, or disputes.
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Kangkan Kishor Sharma, an M.A. in Media and Journalism, serves as the Chief Contributor at NestOfNews.com. He contributes regularly, bringing insight, passion, and a deep commitment to delivering stories that truly matter. His work reflects a thoughtful understanding of media, storytelling, and the issues shaping today’s world.