The Madras High Court has recognised Cryptocurrency as a property under Indian law. Justice N Anand Venkatesh said that Cryptocurrency is a property because it can be enjoyed and possessed in a beneficial form and held in trust.
Justice Venkatesh utilised a large part of the 54-page judgment to analyse how cryptocurrency fits within established notions of legal property, Bar and Bench said.
Justice Venkatesh referred to Ahmed GH Ariff v. CWT and Jilubhai Nanbhai Khachar v. State of Gujarat cases to note that ‘property’under Indian jurisprudence encompasses ‘every species of valuable right and interest’.
Although digital tokens consist merely of data on a blockchain, they are definable, and can be identifiable, transferable and capable of exclusive control through private keys. These qualities enough to confer a proprietary character, the Madras High Court observed.
The Madras High Court also relied on international precedents including New Zealand High Court’s decision in Ruscoe v. Cryptopia Ltd (in liquidation) and the UK High Court ruling in AA v. Persons Unknown. In both cases concluded that Cryptocurrency is a form of property that can be held on trust, Bar and Bench reported.
The Madras High Court’s rulling was for a petition filed by an investor whose XRP holdings on the WazirX platform were frozen after a 2024 cyberattack, Bar and Bench reported.
The applicant invested Rs 1,98,516 lakh in January 2024 on WazirX exchange platform and purchased 3,532.30 XRP coins. A portfolio account was allotted to her and registered with her mobile number and email address, according to Bar and Bench. Zanmai Labs Pvt. Ltd. runs the WazirX platform.
On July 18, 2024, WazirX informed on its website that one of its cold wallets had been compromised in a cyberattack, resulting in the loss of Ethereum and Ethereum-based tokens (ERC-20). After this, all accounts on WazirX were frozen, including the applicant’s.
WazirX had suffered losses of approximately $230 million because of the attack.
