Many governments around the world are still grappling with how to regulate cryptocurrencies, leaving them in a legal gray zone. However, a growing number of countries have begun defining digital assets as property, a move that clarifies ownership rights and integrates them into existing tax systems.
In the U.S., the IRS treats crypto as property for tax purposes, meaning profits from sales, exchanges, or purchases are subject to capital gains tax. British courts have taken a similar stance, recognizing digital tokens as personal property that can be traced, recovered, or frozen in cases of theft and fraud. Singapore’s court has also ruled that cryptocurrencies can be held in trust, confirming their status as assets protected under civil law.
India has also joined the growing list of jurisdictions acknowledging crypto as property. On October 25, the Madras High Court delivered a landmark interim judgment declaring that digital tokens like XRP qualify as property capable of being owned and held in trust under Indian law. The ruling represents the first formal recognition of crypto ownership rights in the country.
The case stemmed from a lawsuit filed by a WazirX user named Rhutikumari, whose 3,532.30 XRP—valued at roughly $9,400—was frozen after the exchange suffered a major hack in July 2024.
WazirX, one of India’s largest crypto exchanges, lost roughly $235 million in the breach. In response, it introduced a plan to distribute the financial impact across its user base, a move the petitioner argued infringed on her ownership rights.
The exchange defended its decision by citing approval from a Singapore court, contending the issue fell beyond Indian jurisdiction. The Madras High Court disagreed and found that since the user had funded her account through a bank in India and operated within India, the matter fell under domestic legal authority.
Justice N. Anand Venkatesh, who presided over the matter, concluded that digital assets are intangible but nevertheless qualify as property deserving legal protection. The court ordered WazirX’s Indian operator, Zanmai Labs, not to reallocate the petitioner’s tokens and to furnish a bank guarantee of approximately $11,500 as interim relief.
While India does not yet have a comprehensive regulatory framework for digital currencies, the 2022 Finance Act taxes them as “Virtual Digital Assets.” Profits from crypto trading are taxed at 30% on the gross amount. Additionally, a 1% tax is deducted on transfers over $113 to track transactions.
While the ruling applies only to this specific case, it could shape future legal interpretations and push Indian lawmakers to establish comprehensive rules for the country’s fast-evolving digital asset market.
Crypto companies like Canaan Inc. (NASDAQ: CAN) hope that more countries move to clarify the legal status of digital assets so that people owning cryptos can be assured of protection for their holdings.
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