Madras HC recognises cryptocurrency as property, says it can be held in trust
The Madras High Court ruled that cryptocurrency qualifies as property capable of ownership and trust, rejecting its classification as speculative. Justice N Anand Venkatesh said crypto assets have identifiable, transferable characteristics, granting them legal standing under India’s Income Tax Act as virtual digital assets.
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The Madras High Court has declared that cryptocurrency qualifies as property, a virtual asset capable of being “enjoyed and possessed in a beneficial form” and even “held in trust,” Bar and Bench reported.
The observation came from Justice N Anand Venkatesh while hearing a case between Zanmai Labs Pvt Ltd (the Indian arm of WazirX) and a crypto investor whose 3,532.30 XRP tokens were frozen following a cyberattack in July 2024.
Rejecting the notion that digital tokens lack material existence, the court held that cryptocurrencies, despite being intangible and not recognised as legal tender, possess the essential features of property**.
“There is no doubt that cryptocurrency is a property. It is not tangible, nor is it a currency. However, it is a property that can be enjoyed and possessed in a beneficial form and is capable of being held in trust,” the court said.
Justice Venkatesh elaborated that cryptocurrencies have a defined, identifiable, and transferable nature, with ownership secured by private keys, granting them exclusivity similar to other forms of property.
To substantiate the reasoning, the court cited **Supreme Court precedents**, including *Ahmed GH Ariff vs CWT* and *Jilubhai Nanbhai Khachar vs State of Gujarat*, expanding the interpretation of “property” beyond physical or traditional assets.
Crucially, the court also clarified that cryptocurrency transactions should not be treated as speculative, as they fall under the category of “virtual digital assets” (VDAs) as defined by Section 2(47A) of the Income Tax Act, 1961.
“Under Indian law, crypto is a virtual digital asset and not a speculative transaction. It can be traded, stored, and sold — features that give it legal and economic value,” Justice Venkatesh observed.
hile the Reserve Bank of India continues to maintain a cautious stance on crypto, the court’s recognition signals a growing judicial effort to create legal clarity in the grey zones of digital finance.
