Madras High Court’s Bold Move: Why Crypto Now Counts as Property in India
India Takes a Big Step Forward on Digital Assets
The Madras High Court has made a clear ruling that changes how cryptocurrency is viewed in India. In a recent case, the court decided that crypto tokens held on exchanges are
What Happened in the WazirX Case
A user named Rhutikumari bought over 3,500 XRP tokens on the WazirX platform. These tokens were kept in the exchange’s custody. After a major cyberattack in July 2024 that caused huge losses, the platform froze many accounts. A plan was then made in Singapore to share the losses among all users. Rhutikumari argued that her tokens were not touched by the hack and should not be part of any loss-sharing plan.
She asked the Madras High Court for protection while the matter goes to arbitration in Singapore. The court had to answer several important questions about crypto, ownership, and court powers.
Key Questions the Court Answered
Can Indian Courts Help in Foreign Arbitration Cases?
Yes. Even though the arbitration is seated in Singapore, the court said it can still give interim relief. The user lives in India, used the platform from Chennai, and the assets are linked to India. This meets the rules under Indian arbitration law.
Is Cryptocurrency Real Property?
The court said yes. Crypto works like digital assets held in trust. The exchange controls the keys, but the user keeps beneficial ownership. This is similar to how shares are held in demat form. The court looked at rulings from other countries and Indian tax laws that already treat crypto as something that can be owned and traded.
Can Foreign Restructuring Plans Override User Rights?
The court did not fully decide this. It left the bigger questions for the arbitration panel. But it made clear that a user’s clear intention to go to arbitration is enough to seek court help in India.
What This Means for Crypto Users and Exchanges
This ruling gives Indian crypto holders stronger protection. Exchanges must treat user assets with care and cannot simply spread losses without checking ownership rights. It also shows that Indian courts will step in to protect digital assets even when arbitration happens abroad.
For the wider industry, the decision adds clarity at a time when India still lacks full crypto rules. It supports the idea that crypto should be handled like other valuable assets in legal matters.
Looking Ahead
The case highlights the need for better rules on crypto custody and cross-border disputes. As more people use digital assets, courts will likely see similar fights. This Madras High Court order sets a helpful example for protecting user rights while arbitration runs its course.
Overall, the judgment strengthens the position of crypto as a legitimate form of property in India and opens the door for stronger legal safeguards in the future.
