In a landmark judgment that could reshape the digital asset ecosystem in India, the Madras High Court has officially recognised cryptocurrency as “property” under Indian law. The ruling, delivered in Rhutikumari v. Zanmai Labs Pvt Ltd (2025), marks the first judicial pronouncement in India to explicitly grant property status to crypto assets.

For millions of Indian investors, NRIs, exchanges, and fintech companies, this ruling brings long-awaited legal clarity, stronger protections, and a more transparent regulatory landscape. At Dinesh Aarjav & Associates (DAA), we help clients across India, the US, UK, Singapore, UAE, and Australia navigate evolving crypto, NRI, and cross-border tax laws. This update is crucial for anyone dealing with digital assets in India or involved in India-Singapore crypto disputes.

Why This Ruling Matters for Crypto Investors in India and NRIs

The Court held that cryptocurrency is not currency, nor a mere speculative instrument — but a form of intangible movable property that can be:

• Owned
• Possessed
• Transferred
• Held in trust
• Protected through proprietary injunctions

This gives crypto holders property rights, not just contractual rights — transforming the legal landscape entirely.

Key Benefits for Investors

• Your crypto can no longer be treated merely as a liability or contractual claim.
• In cases of exchange disputes, cyberattacks, freezing of accounts, or insolvency, investors now enjoy property-level protection, similar to other financial assets.
• NRIs holding crypto through India-based exchanges now have stronger grounds for legal protection under Indian law.

Background: The WazirX Cyberattack and the India–Singapore Legal Battle

The case arose from the WazirX cyberattack (July 2024) where over USD 230 million in ERC-20 tokens were compromised. Following the breach:

• Accounts were frozen.
• A restructuring scheme was proposed in Singapore by WazirX’s foreign parent.
• Investors disputed the pooling and redistribution of their assets.

The petitioner argued that her XRP tokens (not affected by the hack) were about to be reallocated without consent — violating her proprietary rights.

Zanmai Labs argued:

• They were only a distributor, not custodian.
• Singapore courts should determine investor rights.

The Madras High Court disagreed — and this is where the judgment becomes historic.

Key Highlights of the Madras High Court Judgment

1. Cryptocurrency Is “Property” Under Indian Law

This is the most significant takeaway.

The Court held that crypto is intangible property capable of ownership and trust creation, aligning with:

• UK High Court (AA v Persons Unknown)
• Singapore High Court (ByBit v Ho Kai Xin)
• Hong Kong Court (Re Gatecoin)
• New Zealand High Court (Ruscoe v Cryptopia)

This places India firmly within global crypto jurisprudence standards.

2. Crypto Held on an Exchange = Asset Situated in India

This allows Indian courts to exercise jurisdiction in disputes involving:

• India-based exchanges
• India-located users
• Cross-border crypto transactions involving NRIs

Even when foreign entities (like Binance or foreign holding companies) are involved.

3. Exchanges Have Fiduciary Duties to Users

The Court ruled that exchanges function as custodians, making them responsible for:

• Safeguarding user assets
• Preventing value erosion
• Providing transparent asset segregation
• Returning the exact crypto units held by users

This ruling could reshape how exchanges maintain cold wallets, reserves, and user protection mechanisms.

4. Freeze on Operations ≠ Right to Reallocate User Holdings

Exchanges cannot use restructuring or insolvency strategies to pool user assets unless explicitly consented.

The Court ordered:

• Preservation of XRPs
• A bank guarantee securing the full value of the user’s holdings

This emphasises investor-first enforcement in India.

Major Implications for India’s Crypto Ecosystem

1. Stronger Consumer and Investor Protection

Crypto may now qualify as “goods” under the Consumer Protection Act.
This allows complaints for:

• Defects in digital assets
• Service deficiency by exchanges
• Price manipulation or misrepresentation

Investors can now pursue both product liability and service deficiency claims.

2. Digital Assets Are Protected During Exchange Insolvency

Under Section 36 of the Insolvency and Bankruptcy Code (IBC):

Insolvency estate cannot include “property held in trust.”

Crypto held by users is now insulated from being treated as exchange assets.

This is a game-changer for investors on any Indian exchange.

3. Possibility of Crypto-Backed Lending & Finance in India

By recognising crypto as property, India opens the doors for:

• Secured lending
• Crypto collateralisation
• Pledge/hypothecation of digital assets
• Trust-based custody models
• Institutional digital asset products

Banks and NBFCs may now consider regulated structures around digital assets.

4. Higher Governance Standards for Exchanges

This ruling will likely push for:

• Better segregation of customer assets
• Clear custodial arrangements
• Independent audits of wallets
• Higher cybersecurity standards

India may also move toward regulations similar to Singapore’s PSA or the UK FCA’s rulebook.

What This Means for NRIs with Crypto Holdings

At Dinesh Aarjav & Associates, we regularly assist NRIs investing in India, holding crypto abroad, or trading on global exchanges, especially in matters related to NRI taxation. This ruling impacts NRIs in several ways.:

• Stronger legal protection when dealing with India-based exchanges
• Clearer tax classification under “Virtual Digital Assets”
• Better protection in cross-border disputes
• Stronger grounds for reclaiming assets during exchange failures
• Ability to assert proprietary rights even when residing abroad

If you are an NRI holding crypto through WazirX, CoinDCX, CoinSwitch, or international exchanges, this ruling is directly relevant for your compliance strategy.

Conclusion: A Milestone for India’s Digital Asset Future

The Madras High Court’s judgment sets a powerful precedent — for the first time, crypto assets are treated as property with full-fledged ownership rights, aligning India with global digital asset jurisprudence.

This decision improves:

• Investor protection
• Exchange accountability
• Cross-border dispute clarity
• Security of digital asset ownership
• Institutional adoption viability

As India continues shaping its crypto regulatory landscape, this ruling brings the clarity that investors and NRIs have long needed.

Need Guidance on Crypto Taxation, Cross-Border Structures, or NRI Compliance?

At Dinesh Aarjav & Associates, we specialise in:

• NRI & expatriate taxation
• India–US & India–Singapore cross-border tax planning
• Crypto taxation & compliance
• Structuring digital asset holdings
• Cross-border estate planning
• FEMA & international money movement
• DTAA and global tax optimization