The interim order, handed on 25 October by justice N. Anand Venkatesh, granted aid to an investor whose cryptocurrency holdings have been wrongfully frozen by WazirX following a large cyberattack in 2024.
Mint explains what the courtroom mentioned, the broader authorized context, and what this means for traders in India’s evolving crypto ecosystem.
What was the case about
The case was filed in early 2025 by a crypto investor Rhutikumari in opposition to Zanmai Labs Pvt. Ltd, the Indian operator of WazirX—one of many nation’s largest crypto exchanges.
In July 2024, WazirX suffered a significant hack by which cybercriminals stole round $230 million price of Ethereum-based tokens. Following the assault, the change froze a number of consumer accounts, together with Rhutikumari’s, though her 3,532 XRP cash have been unrelated to the stolen tokens.
She approached the Madras Excessive Court docket, arguing that her holdings have been her personal property and that WazirX had no authority to freeze, combine, or redistribute them as a part of its loss-recovery course of.
WazirX, in its defence, argued that the case ought to go to Singapore arbitration and that freezing accounts was a safety measure taken within the aftermath of the 2024 hack.
What the courtroom held
The excessive courtroom dominated in favour of the investor, directing Zanmai Labs to furnish a financial institution assure of ₹9.56 lakh or deposit the equal quantity in escrow till arbitration concludes.
The courtroom held that cryptocurrencies, although intangible, possess the important attributes of property since they are often owned, loved, transferred, and held in belief.
“There might be little doubt that cryptocurrency is property. It isn’t tangible property nor foreign money. Nevertheless, it’s property able to being loved and possessed in a helpful kind,” the courtroom noticed.
In his reasoning, justice Venkatesh drew from world precedents to help the popularity of cryptocurrencies as property. He cited the landmark New Zealand case Ruscoe vs Cryptopia Ltd, the place digital tokens have been acknowledged as property held in belief by an change, and the UK case AA vs Individuals Unknown, which handled bitcoin as an asset able to possession and authorized safety.
This makes the Madras Excessive Court docket order the primary judicial recognition in India that cryptocurrencies are legally protectable property.
India’s authorized panorama on crypto
India’s relationship with cryptocurrency has been turbulent and inconsistent.
The Reserve Bank of India (RBI) banned banks from servicing crypto entities in 2018, however the Supreme Court docket struck down the ban in 2020, calling it disproportionate. Since then, crypto has operated in a authorized gray space, neither banned nor absolutely regulated.
The Finance Act 2022 labeled crypto as Digital Digital Property (VDAs), imposing a 30% tax on features and a 1% TDS on all trades. In 2023, the Prevention of Cash Laundering Act (PMLA) was prolonged to cowl exchanges, mandating KYC and suspicious transaction reporting.
Nonetheless, there is no such thing as a devoted regulation or regulator governing the sector.
The RBI stays cautious. Former governor Shaktikanta Das had warned traders that crypto “has no underlying worth, not even a tulip,” referencing the Dutch tulip bubble. In October, RBI governor Sanjay Malhotra reiterated issues about crypto’s dangers to monetary stability, whilst India’s CBDC pilot expanded to over seven million customers.
Regardless of regulatory uncertainty, India now leads the world in crypto adoption, with almost 119 million customers, in accordance with CoinLedger and Chainalysis.
What the ruling means for traders
Consultants say the ruling affords traders the authorized recognition and safety lengthy lacking from India’s crypto house, giving them stronger recourse when exchanges act unilaterally.
Stella Joseph, accomplice at Financial Legal guidelines Apply, mentioned the choice permits traders to hunt conventional property treatments resembling injunctions, escrow preservation, and financial institution ensures quite than counting on exchange-driven loss-sharing schemes. “That shift strengthens an investor’s potential to cease unilateral reallocation of belongings and to press proprietary claims when wallets are frozen or compromised,” Joseph mentioned.
B. Shravanth Shanker, advocate-on-record on the Supreme Court docket, famous that the ruling lets traders maintain exchanges accountable for failing to guard their crypto, even beneath drive majeure clauses, for the reason that courtroom mentioned poor safety can’t excuse worth loss. Buyers may separate unaffected belongings throughout restructuring and declare refunds for losses not tied to a breach.
“Ruling additionally provides a firmer footing to lodge claims in insolvency and restructuring proceedings, the place crypto can now be handled as an asset of the property,” mentioned Ashima Obhan, senior accomplice at Obhan & Associates.
What lies forward
Whereas the ruling provides crypto traders much-needed authorized recognition and safety, the business remains to be ready for clearer authorities tips.
Based on Vivek Ramji Iyer, Companion at Grant Thornton Bharat, the ruling provides a brand new layer of regulatory ambiguity. “Crypto is now handled three alternative ways: taxed as a digital digital asset beneath the Revenue Tax Act, unrecognised by monetary regulators, and now deemed property by the courtroom,” he mentioned.
He warned that the choice additionally raises GST and enter tax credit score implications, calling for the federal government to align its tax, regulatory, and authorized stance on the crypto ecosystem to keep away from additional confusion.
Shilpa Mankar Ahluwalia, accomplice at Shardul Amarchand Mangaldas & Co., mentioned the following step must be to categorise crypto belongings by their use case, whether or not as cost, funding, or asset tokens, to make clear their therapy beneath Indian regulation.
