The Madras High Court ruled that in According to Indian law, cryptocurrencies should be classified as property. This decision was made in a case related to the hacking of the WazirX crypto exchange for $230 million.
Judge Anand Venkatesh announced that cryptocurrencies can be owned and managed by companies. Digital assets can be identified, transferred, and controlled using private keys.
“Cryptocurrency has all the basic characteristics of ownership. It is neither a tangible asset nor a currency. This is a property that can be used and owned, and it can be profitable. Crypto assets can be held in trust,” the judge ordered.
Earlier, an investor who purchased 3532 XRP worth 198,516 rupees (approximately $2,254) on the WazirX exchange in January 2024 filed a lawsuit. However, after a hacker attack in July of the same year, the exchange froze all accounts. The court rejected the arguments of Zanmai Labs, the operator of WazirX, that the affected investor should share the exchange’s losses from the hack. Judge Venkatesh noted that the client’s XRP was not related to the stolen tokens. The WazirX platform was attacked with ERC-20 tokens, which are completely different crypto assets, according to the court.
The court also rejected the argument of WazirX’s parent company, Zettai Pte, which is registered in Singapore, that the case should not be heard by Indian courts. Venkatesh referred to the PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd case, which was heard by the Supreme Court of India in 2021, and ruled that Indian courts can protect assets located in India.
The investor made transactions in the Indian city of Chennai using a local bank account, so the case falls under the jurisdiction of the Madras High Court, the judge explained. He noted that Zanmai Labs is registered with the Indian Financial Intelligence Unit (FIU), unlike Zettai Pte. In conclusion, the judge urged crypto platforms to separate their own assets from customer funds, conduct regular independent audits, implement customer identification (KYC) procedures, and comply with anti-money laundering (AML) regulations.
Last year, the Madras High Court banned the freezing of crypto investors’ bank accounts, allowing law enforcement agencies to block only the amounts related to alleged cryptocurrency fraud, rather than entire bank accounts.
