techprosecutor

Introduction On 25 October 2025, the Madras High Court passed a landmark verdict which jurisprudentially analysed the qualification of cryptocurrency to be property under Indian law. The dispute arose after the applicant was aggrieved by redistribution of her XRP coins following a cyber-attack which resulted in a loss of around 230 Million US Dollars for the respondent. The respondent froze the crypto account of the applicant which prevented her from accessing and liquidating her XRP coins. While deciding the dispute, the Madras High Court analysed various foreign as well as Indian precedents in order to determine the nature of cryptocurrency. Analysis of foreign case laws The Court analysed cases emerging from the following jurisdictions: ·       United Kingdom: AA v. Persons Unknown (2019) – The Court held that Bitcoin could be considered a form of property, capable of ownership and transfer. ·       Singapore: Janesh v. Unknown Persons (2022) and ByBit Fintech Ltd. v. Ho Kai Xin (2023) – It was held that digital tokens can be defined, identified, transferred and stored like any other form of property. ·       New Zealand: Ruscoe v. Cryptopia Ltd. (2020) – The New Zealand High Court held that crypto currencies, as digital assets, are a form of property that are capable of being held on trust. Two questions arose in this case: Ø  Is crypto currency a ‘property’ under the New Zealand’s Companies Act? Ø  Was the crypto currency held on trust for the account holders? The Court held that crypto currencies were a type of intangible property as they obtained their definition as a result of the public key recording the unit of currency and the control and stability necessary to ownership and for creating market in the coins are provided by the private key attached to the public key and the generation of a fresh private key upon a transfer of the relevant coin. Therefore, it was held that it was a type of property and thus, capable of being held on trust. Analysis of Indian case laws: ·       Ahmed G.H. v. CWT (1969): It was held that ‘property’ was a term of the widest import and subject to any limitation which the context may require, it signified very possible interest which a person can clearly hold or enjoy. ·       Jilubhai Nanbhai Khachar v. State of Gujarat (1995): It was held that in the legal sense, ‘property’ meant the aggregate of rights which were guaranteed and protected by law. It extended to every species of valuable right and interest. Therefore, the word ‘property’ connotes everything which is subject of ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or which goes to make up wealth or estate or status. ·       Internet and Mobile Association of India v. Reserve Bank of India (2020): In this case, an RBI circular restricting banking services for persons involved in virtual currency was challenged. The Supreme Court held that RBI’s power to act against financial risks must be exercised in a proportionate manner and the circular violated Article 19(1)(g). Therefore, the judgement implicitly recognised crypto. Final Decision of the Madras High Court The High Court observed that the term ‘currency’ for crypto currency was a misnomer as currency is an official index of value. Crypto currencies are streams of 1s and 0s residing in a blockchain managed by the issuer of the crypto currency. These are called digital assets which are stored and recorded on the blockchain ledger. Each ledger has a public and private key associated with it. Therefore, after analysing the abovementioned decisions, the Court concluded that ‘crypto currency’ was property which was capable of being enjoyed, possessed and being held in trust. The Court further held that as crypto currency was a virtual digital asset, it was taxable under as per the Income Tax Act, 1961. Conclusion The Rhutikumari v. Zanmai Labs Pvt. Ltd. decision marks a significant moment in how Indian courts understand technology and ownership in the digital age. The Madras High Court looked beyond the technical complexity of cryptocurrency to recognise that it represented something people could own, control, and lose just like any other valuable asset. By declaring cryptocurrency to be a form of intangible property, the Court acknowledged that the law must evolve with changing times and protect individuals who invest their hard-earned money in digital assets.