IN OCTOBER 2025, the Madras High Court took a noteworthy step in India’s crypto framework. The High Court had to decide on whether a digital token – bought on a Mumbai-based exchange and lost in a cyber-attack – could be treated as “property” under Indian law.
The plaintiff, Rhutikumari, had invested in Ripple XRP coins on WazirX, a bitcoin and crypto exchange trading platform. WazirX’s parent (Zanmai Labs) stopped all trading and her holdings were frozen subsequent to a major cyber-attack (the company lost USD 230 Million). By user agreement, she had to face a Singapore-seated arbitration scheme that would distribute user losses to make good losses. She had one option - to turn to the Madras High Court bench under Section 9 of the Arbitration and Conciliation Act, 1996, to protect her coins.
The High Court had to answer stark questions: Could an Indian court even intervene when a foreign court’s scheme loomed? Were Rhutikumari’s XRP holdings her property? Did the exchange owe her a duty of trust?
It held that cryptocurrencies are indeed “property”, intangible wealth deserving legal protection, and that exchanges must treat user assets as held in trust. It brushed aside technical objections about Singapore arbitration and the exercise of jurisdiction.
The judgment, authored by Justice N. Anand Venkatesh, exposes a gap in India’s legal framework and implicitly urges legislators to step in. In the absence of clear laws, the High Court had built its own framework from first principles, making this an important ruling for digital assets and investor rights.
Could an Indian court even intervene when a foreign court’s scheme loomed? Were Rhutikumari’s XRP holdings her property?
What is a cryptocurrency, legally speaking?
At the heart of the case lay an issue: what is a cryptocurrency, legally speaking? The High Court noted that tokens like XRP are neither currency nor a physical asset. It noted that they exist purely as data on a blockchain. Yet, they carry market value and have an economic role, which makes them something more than mere information.
The High Court cited global precedents, and it observed that jurisdictions across the globe are increasingly treating crypto as property. For example, it cited foreign rulings – a UK court held that Bitcoin could be property capable of being owned, and the New Zealand High Court concluded that cryptocurrencies are a type of property that can be held in trust.
But what counts as property in Indian law? The Supreme Court of India has long defined “property” in the broadest terms - everything one can hold or enjoy. In Ahmed G.H. Ariff v. CWT (1969), the Supreme Court noted that property is “of the widest import” – essentially, “every possible interest” a person can hold. Relying on this logic, the Madras High Court reasoned that cryptocurrency, although not a legal tender, falls within this broad sweep. Justice Venkatesh noted that crypto is treated by law (for tax purposes) as a “virtual digital asset”, not a mere speculative bet. Once you invest rupees into a crypto exchange and receive tokens in return, those tokens can be stored, transferred and traded like any valuable asset. This satisfies the classic attributes of property.
“The term property has a most extensive signification,” Justice Venkatesh paraphrased from old lexicons. Crypto tokens, though incorporeal, are “capable of being enjoyed and possessed in a beneficial form”. They may not confer company shares or oil rights, but they represent economic value you own. Thus, the High Court held unabashedly: cryptocurrency is property capable of ownership and legal protection. This means that the law will shield these assets against wrongful interference just as it would shield a bank balance or a stock portfolio.
The comparison drawn was illuminating. Justice Venkatesh likened crypto coins to dematerialised shares: both exist only in data, not in paper. But with shares, you get enforceable rights in a company. With crypto tokens, you get no underlying entitlement at all - but your investment has bought something of value. That paradox does not make crypto valueless; it simply makes it a new kind of property. And, recognising it as property imposes a kind of duty: those who hold it must treat it with care and should be accountable.
Fiduciary role
Once Rhutikumari’s XRP was deemed as her property, the next question in line was - who was safeguarding it? She had bought XRP through WazirX (a Zanmai Labs platform). After the hack, she could neither sell nor withdraw her coins. Zanmai (the Indian company behind WazirX) argued that the actual crypto wallets were held by an overseas affiliate (Binance/Zettai) and that it merely handled the rupee leg. The High Court rejected this division. It saw Zanmai, through its WazirX operation, as effectively the custodian of the tokens from an Indian user’s perspective.
Zanmai’s own agreements highlighted the point. Under the “Broker Agreement,” Zanmai had agreed that WazirX was its mirror - meaning that assets handled on WazirX were to be treated as Zanmai’s obligations. Therefore, Justice Venkatesh found that every token in a WazirX user’s wallet was in trust. Those assets were held on behalf of the user, and Zanmai owed a fiduciary duty to keep them safe.
This is a profound characterisation, as it places crypto exchanges under a duty of loyalty and care, akin to trustees. They cannot claim simply hands off custody and blame someone else if things go otherwise.
This gives real teeth to investor rights. An exchange like WazirX cannot willy-nilly offload or repurpose customer tokens. If a user’s coins are in a wallet on WazirX (and its controllers) must be held accountable for the coins. The High Court referred to the Bombay High Court’s ruling in Zanmai Labs v. Bitcipher Labs (2025), which had similarly held that crypto assets in exchange custody are held in trust with fiduciary obligations to users. It even stressed that unless the user consents, an exchange can’t claim it handed over those assets to some other party to manage - it still remains accountable.
Further, though Binance built the WazirX technology, WazirX’s Indian arm was a registered financial entity. But the foreign players were not registered in India. In the High Court’s view, Zanmai had the legal authority and duty in India, regardless of where the technical keys were kept. So, Zanmai could not escape liability by simply pointing to a Singapore wallet.
The judgment closes a loophole. Exchanges operate through complex cross-border chains, but courts can pierce those veils where users’ rights are concerned. If an exchange essays a transaction, it cannot later claim that it was just a mere middleman for money it didn’t really hold. Following the fiduciary duty doctrine, once an Indian consumer deposits rupees and acquires crypto, the exchange must safeguard it as property in trust.
One striking implication is on cyber-losses and “socialised” recovery schemes. The High Court echoed: loss cannot be dumped equally on every Indian user without consent in a situation where a foreign wallet was hacked. Instead, any loss allocation must be by the contract terms.
An exchange can’t impose a Singapore plan to split losses unless the users have agreed to such a contingency. Each user’s claim to their own crypto must be respected, not extinguished as a group.
Justice Venkatesh found that every token in a WazirX user’s wallet was in trust. Those assets were held on behalf of the user, and Zanmai owed a fiduciary duty to keep them safe.
How did the High Court respond to the jurisdictional challenges?
The High Court had to clear procedural roadblocks. Zanmai’s first line of defence was jurisdictional: the WazirX user agreement had a clause that any disputes would go to the Singapore International Arbitration Centre (‘SIAC’). Normally, that would keep Indian courts away from final issues. But Section 9 of the Arbitration and Conciliation Act, 1996 allows interim relief by an Indian court even when an arbitration is abroad, if it involves Indian parties or assets. The High Court referred to the Supreme Court’s decision in PASL Wind Solutions v. GE Power Conversion (2021) which had already clarified that condition.
The High Court found that the condition was met: Rhutikumari used the WazirX app from Chennai and transferred funds from her Kotak Mahindra account in Chennai. Her XRP coins remained effectively held in India on the platform. When Zanmai froze the WazirX platform, it prevented her from accessing property located in India. That was enough cause of action here. The petition was maintainable under Section 9, as one party was Indian and the assets were onshore.
Zanmai then raised two familiar procedural objections: that there was no “trigger notice” (an intent to arbitrate), and that the arbitration had already started in Singapore. The High Court was unsympathetic. It reasoned that Rhutikumari could not have issued a trigger notice before knowing the final shape of the scheme.
Only after the Singapore High Court approved a revised plan in October 2025 did she exactly know where she stands. It would be unfair to penalise her for waiting. With clarity now at hand, she would issue the notice, but by then, her need for protection under Section 9 was urgent. The High Court rejected the notion that she had waived her rights by not launching arbitration.
Having found jurisdiction proper, the High Court granted the relief: it directed Zanmai to deposit a sum roughly equal to the value of Rhutikumari’s XRP (over ₹9.5 lakh) by way of bank guarantee or escrow, until the arbitration at SIAC concluded. This was a practical move to guarantee her interests aren’t wiped out while the legal dust settles.
A policy void remains
Perhaps the most telling aspect of this judgment is not what it says, but what it implicitly notes – the lack of clear crypto law in India. Nowhere in the reasoning do we see a statute specifically defining cryptocurrencies.
The High Court was compelled to, by reason and precedent, and began to set the rules. It noted the Income Tax Act’s Section 2(47A), which defined “virtual digital assets”, was meant for taxes, not investor protection.
Should the fate of millions in crypto be decided ad hoc by judges squeezing analogies? India has a judicial answer, but the lack of a statutory anchor means uncertainty remains.
In polite terms, Justice Venkatesh worked with constitutional logic and existing statutes. But in plain words, the judiciary is writing policy here. Policymakers must step in as India needs a coherent crypto framework that defines rights, obligations, classifications, and enforcement mechanisms. The crypto essentials should not be left to the court’s creativity and discretion.
A welcoming decision but policy coherence is needed
The decision is an important milestone, but should not be looked at as an endpoint. It did recognise that the Indian law protects crypto investors, but at the same time, it also highlights how ad hoc the current protection is. The High Court’s holdings on property rights and trust duties are welcoming, as they will boost investor confidence and deter bad-actor exchanges. But such piecemeal evolution is inherently reactive. We need a dedicated legislative approach that would allow advance planning.
Moreover, the judgment’s reasoning doesn’t easily map onto every scenario. It assumes a clear factual line: here, user funds were converted to tokens and held on a platform under an identifiable contract. But many crypto transactions fall outside that neat model (think peer-to-peer exchanges, DeFi lending, NFTs, etc.). We cannot depend on judges to resolve all such cases by analogy.
Policy coherence demands international alignment. Cryptocurrencies are global by design. India would do well to watch regulatory moves in other countries.
The High Court’s holdings on property rights and trust duties are welcoming, as they will boost investor confidence and deter bad-actor exchanges.
Rhutikumari v. Zanmai Labs is a precedential bit of law-making by the bench. It resurrects an old constitutional concept (property) that stretches it to cover blockchain tokens, and in doing so it extends fundamental civil protections into the digital transaction world. This is the kind of “living law” approach that constitutional and property jurisprudence sometimes requires in contemporary domains.
The courts can only go so far without democratic direction. The ball is now in the legislature’s court to take a step towards crypto laws that are clear, fair, and in line with constitutional values. Until then, digital assets disputes will keep reaching the courts, and judges will keep writing the rulebook case by case.
Find the Madras High Court Judgment here.