India’s Crypto Watershed: Court Declares Digital Assets as Legitimate Property

Breaking judicial precedent shakes crypto foundations

Indian judiciary delivers landmark ruling that redefines digital asset classification

The Property Paradigm Shift

Cryptocurrencies shed speculative skin as courts grant formal property status—bypassing years of regulatory ambiguity. The ruling cuts through traditional financial skepticism, treating digital holdings as legitimate assets rather than gambling chips.

Legal Framework Overhaul

Judges dismantle speculative asset arguments point by point, establishing precedent that could reshape global crypto regulation. The decision creates tangible property rights where volatility once dominated the conversation.

Market Implications Unleashed

Investors gain stronger legal footing while traditional finance scrambles to adapt—because nothing disrupts banking quite like courts legitimizing what they've spent years dismissing as 'play money.'

This judicial earthquake proves crypto's staying power extends beyond trading screens and into courtrooms—finally giving digital assets the legal backbone they've desperately needed while making traditional financial gatekeepers question their entire playbook.

Court defines crypto property rights

Justice Venkatesh explained that cryptocurrencies possess all the main features of property. The Court stated: “There can be no doubt that ‘cryptocurrency’ is a property. It is not a tangible property, nor is it a currency. It is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust.”

The judge noted that cryptocurrencies are identifiable, transferable, and controlled through private keys. He referenced Section 2(47A) of the Income Tax Act, 1961, which classifies cryptocurrencies as “virtual digital assets.”

The Court dismissed Zanmai Labs’ argument that the investor should share losses from the hack. Justice Venkatesh pointed out that the investor’s XRP coins were separate from the stolen Ethereum-based tokens.

“What were held by the applicant as cryptocurrencies were 3532.30 XRP coins. What were subjected to cyber attack on 18.7.2024 in the WazirX platform were ERC 20 coins, which are completely different crypto currencies,” the Court observed.

Indian courts hold jurisdiction over domestic crypto assets

The Court rejected claims that Singapore arbitration rules prevented Indian court intervention. Justice Venkatesh cited the Supreme Court’s decision in PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd (2021), confirming that Indian courts can protect assets located in India.

The investor’s transactions originated in Chennai and were made using an Indian bank account, placing the case under the jurisdiction of the Madras High Court. Justice Venkatesh noted that Zanmai Labs is registered with India’s Financial Intelligence Unit, unlike its Singapore parent company Zettai Pte Ltd.

The judge called for Web3 platforms to maintain corporate governance standards, including separate client funds, independent audits, and strong KYC and anti-money laundering protocols.