In a landmark ruling with significant implications for the legal status of digital assets in India, the Madras High Court has held that cryptocurrency, although not money in the traditional sense, must be treated as 'property' under Indian law.

The court's crucial decision legally categorizes virtual digital assets (VDAs), clarifying their status within the nation's financial framework. Justice Anand Venkatesh observed that while cryptocurrency is intangible and not recognized as legal tender or cash, its intrinsic value qualifies it as property.

"Cryptocurrency is intangible and not cash, yet it holds legal value and is undoubtedly property," the judge stated. "It is capable of being enjoyed, possessed, and is beneficial as a property." Malegalalli Madhumagalu Hardcover

The court pointed out that cryptocurrency possesses the essential characteristics of property: it can be owned, controlled, and effectively transferred. The judgment specifically referenced the classification of these assets as Virtual Digital Assets under Section 2(47A) of the Income Tax Act, 1961. Furthermore, the High Court stressed that cryptocurrencies do not fall under the category of 'speculative activity'.

This ruling was delivered in response to a petition filed by investors (the petitioners) whose cryptocurrency amounts were frozen on the WazirX platform following a cyberattack in July last year.

The applicants had suffered a loss of Ethereum cryptocurrency after their cold storage system (used to store cryptocurrencies) was compromised by the cyberattack. The Madras High Court’s ruling on this petition marks a major development in recognizing and regulating digital assets. Also Read: India's 'Most Wanted' Preacher Zakir Naik to Receive Red Carpet Welcome in Bangladesh!