In a groundbreaking verdict likely to influence how India handles digital assets, the Madras High Court has formally recognized cryptocurrencies, including XRP, as property under Indian law.
The ruling, delivered by Justice N. Anand Venkatesh, establishes that digital currencies can hold ownership rights and legal protection similar to other movable assets — a decision that could reshape future crypto litigation in the country.
Rather than treating crypto as a speculative asset, the court described tokens like XRP as “movable, identifiable, and privately controlled through cryptographic keys,” giving them a distinct legal identity within the framework of property law.
A Dispute Over Lost Funds That Changed the Law
The case that triggered this precedent began with a cyberattack on the WazirX exchange, one of India’s most prominent trading platforms. The breach, which occurred in July 2024, drained roughly $230 million worth of Ethereum-based assets and led to the freezing of user accounts.
Among the affected users was an investor who had purchased 3,532 XRP valued at about ₹1.98 lakh months before the hack. Her funds were never directly linked to the stolen Ethereum tokens, yet she found her account locked and assets inaccessible.
Seeking judicial intervention, she argued that her XRP holdings were held in trust by the exchange and therefore separate from the compromised funds. She requested the court’s protection to prevent redistribution of her assets under Section 9 of the Arbitration and Conciliation Act (1996) — a clause that allows courts to safeguard disputed property before arbitration concludes.
WazirX’s Defense — and the Court’s Rejection
The exchange’s operator, Zanmai Labs Pvt Ltd, countered that it was bound by a Singapore court directive under its parent company, Zettai Pte Ltd, requiring users to share losses resulting from the hack. The firm claimed the Indian court lacked jurisdiction since the dispute fell under foreign arbitration rules.
Justice Venkatesh dismissed that argument outright. He clarified that since the XRP purchase was made using an Indian bank account, the Madras High Court had full jurisdiction. He further emphasized that the breach involved Ethereum-based tokens, not XRP, and that the investor’s assets remained untouched by the hack.
Crypto Declared Property Under Indian Law
In his written opinion, the judge cited Section 2(47A) of the Income Tax Act (1961), which defines cryptocurrencies as virtual digital assets (VDAs). He concluded that digital currencies meet all the conditions to be treated as property: they can be owned, transferred, valued, and controlled exclusively by an individual through private keys.
The judgment also signaled a shift in India’s legal understanding of crypto assets — away from viewing them as speculative instruments and toward recognizing them as legally enforceable digital property.
This interpretation gives crypto holders new grounds for asserting ownership rights in court, particularly in cases of exchange mismanagement or hacking incidents.
A Call for Accountability and Better Governance
Justice Venkatesh didn’t stop at classification. His ruling included a strong message to the broader crypto industry, emphasizing the need for corporate governance standards comparable to those in traditional finance.
He instructed exchanges to segregate user funds, implement independent audits, and enforce strict KYC and AML controls to maintain market integrity. The court also underscored the distinction between locally regulated entities — such as Zanmai Labs, registered with the Financial Intelligence Unit (FIU) — and offshore companies like Zettai Pte Ltd and Binance, which remain outside Indian jurisdiction.
By asserting this boundary, the judgment reinforces that any company serving Indian customers must answer to Indian regulators and courts, regardless of offshore affiliations.
Broader Implications for XRP and the Global Market
The case has quickly captured international attention, especially as XRP continues to be a focal point in global debates over the classification of digital assets. Legal experts view the decision as one of the most significant judicial endorsements of crypto ownership rights in Asia.
By equating cryptocurrencies with movable property, India’s judiciary has effectively granted digital assets a foundation for legal protection and recovery — an area where many jurisdictions still lack clarity.
For XRP, which is often positioned as a bridge currency for institutional payment systems, the ruling strengthens its legitimacy and could encourage broader integration into regulated financial infrastructure.
Conclusion
India’s recognition of crypto as property marks a pivotal moment in the evolution of digital law. What began as a dispute over frozen XRP tokens has resulted in a precedent-setting declaration that may influence legislation, taxation, and regulatory approaches far beyond the country’s borders.
As Justice Venkatesh noted, courts will now play a decisive role in shaping the balance between innovation and accountability in the digital economy — and this ruling has ensured that crypto ownership in India now carries both legal protection and responsibility.
