CRYPTOCURRENCY AS PROPERTY: A TURNING POINT FOR INDIA’S DIGITAL FUTURE

India has been treating cryptocurrency like an unwanted visitor for years; it has taxed it, issued warnings about it, and never provided a clear definition. When the Madras High Court ultimately recognised it as property under Indian law, it all changed. This decision offers digital assets long-overdue legitimacy and establishes a precedent that may change India's perspective on virtual assets, but it does not make cryptocurrency legal tender.

The Case That Sparked It

The ruling came from Rhutikumari v. Zanmai Labs Pvt Ltd ( (Madras High Court, October 2025) (October 2025), a case that began with a hack and concluded with a significant definition.

• Rhutikumari, the petitioner, had purchased 3,532 XRP coins on WazirX, an Indian cryptocurrency exchange managed by Zanmai Labs. The exchange halted accounts and announced that investors' money would be managed under a Singapore reorganisation plan following a huge hack worth over $230 million.

• Rhutikumari protested. Why should foreign procedures determine her fate when her account, bank, and transactions were all in India? She filed a case at the Hon'ble Madras High Court, requesting asset protection. The business claimed Singapore was the proper venue for the case. In contrast, Hon'ble Justice N. Anand Venkatesh ruled that Indian courts have jurisdiction as the transactions started in India.

• However, the Court's subsequent action was what really made the case historic. It clarified the true nature of cryptocurrency.

Crypto Is “Property,” Not Currency

The Court ruled:

“There can be no doubt that cryptocurrency is property. It is not currency, nor a physical asset, but property capable of being enjoyed, possessed, and held in trust.”

Simply put, even if something only exists digitally, it is still considered property if it can be possessed, transferred, or has quantifiable worth. According to the Court, cryptocurrency satisfies the following requirements: it is identifiable, controllable, transferable, and definable. More significantly, it stated that an exchange has a fiduciary duty to act responsibly when an investor deposits cryptocurrency with it, as the exchange holds the cryptocurrency in trust. In an area that has long been perceived as lawless, that is a significant step towards accountability.

What “Property” Means in Law

• For a long time, Indian courts have viewed property broadly. The Supreme Court ruled in Ahmed G.H. Ariff v. CWT (1970 AIR SC 2261) (1970) that the term "property" must be interpreted broadly to include any interest having monetary worth, even if ownership isn't absolute. The Court decided that, even if a recipient did not own a waqf, their right to receive income from it was nevertheless considered property for wealth-tax reasons.

• Similar to this, the Court explained in Jilubhai Nanbhai Khachar v. State of Gujarat (1995 Supp (1) SCC 596) (1995) that although the right to property was no longer a fundamental right following the 44th Amendment, it is still a constitutional and legal right under Article 300A, which protects any asset that can be owned, transferred, or valued in monetary terms.

• When taken as a whole, these decisions support the idea that all valued rights and interests are considered "property" under Indian law. The Madras High Court concluded that digital assets with tangible worth, such as cryptocurrency, are covered by the same concept by applying these precedents. International decisions, such as Ruscoe v. Cryptopia Ltd. [2020] NZHC 728 (New Zealand High Court) (2020, New Zealand), which acknowledged cryptocurrencies as intangible property that could be held in trust, were also cited in the finding.India has made a significant move towards legal clarity in the digital economy by conforming to these international views.

What It Means for Investors

This ruling firmly establishes cryptocurrency under Indian law, but it does not convert Bitcoin into rupees. What changes is as follows:

1. You Legally Own It: Cryptocurrency is now accepted as property. Like any other asset, you can claim your holdings if an exchange goes bankrupt, freezes your assets, or is hacked.

2. Investor Protection: Inheritance, estate planning, and bankruptcy can now encompass digital assets. This indicates that the ownership rights of your cryptocurrency are enforceable.

3. Exchange Accountability: Exchanges are now subject to fiduciary duty; improper handling of client funds may result in legal action or fines.

4. Clearer Tax Position: Virtual digital assets are now subject to a 30% tax by the government, which conveniently falls under the heading of "capital assets."

5. Legal Enforcement: Crypto assets can now be attached or recovered by agencies such as the ED or CBI under the PMLA or CrPC, which see them as counterparts of tangible property.

India’s Legal Lag — and the Judiciary’s Push

The gap it reveals, not the verdict itself, is the true story here. India has not yet defined cryptocurrency in its laws, despite taxing it since 2022. Regulators warn, the RBI says it's dangerous, and Parliament continues to postpone enacting regulations. Other nations, like Singapore, the United Kingdom, and New Zealand, have already formalised the legal status of cryptocurrency. Once more, India is allowing the courts to step in where decision-makers failed. The Hon'ble High Court's decision has compelled the government to act. This indicates that India cannot continue to put cryptocurrency in a murky area, especially because courts are already considering it to be a valid type of property.

A Moment of Legal Maturity

As someone following India’s tech-law evolution, I see this as a moment of maturity. Crypto was not romanticised by the court. Its hazards and instability were not disregarded. It only acknowledged the fact that these things are owned by people and have actual value. Whether something is on paper or on the blockchain, it is property when it can be purchased, sold, inherited, or stolen. The Madras High Court has brought India's legal interpretation of cryptocurrency into the twenty-first century by stating this aloud.

Final Word

The decision ultimately provides digital assets with a legal home, but it does not turn India into a crypto sanctuary. It provides investors with ownership protection, exchange responsibility, and a long-overdue basis for appropriate regulation. Even though cryptocurrency isn't "money," it still has value, and value should be protected by the law. Real progress starts when Indian courts acknowledge that for the first time.

References

• Ahmed G.H. Ariff v. CWT, AIR 1970 SC 2261 (Supreme Court of India).

• Jilubhai Nanbhai Khachar v. State of Gujarat, 1995 Supp (1) SCC 596 (Supreme Court of India).

• Rhutikumari v. Zanmai Labs Pvt Ltd, (Madras High Court, 2025).

• Ruscoe v. Cryptopia Ltd., [2020] NZHC 728 (High Court of New Zealand).

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