Madras High Court Rules Cryptocurrency as Property Capable of Being Held in Trust

The Madras high court has made a significant ruling in the case of Rhutikumari vs Zanmai Labs Pvt Ltd and others, holding that cryptocurrency can be treated as a property capable of being enjoyed and possessed in a beneficial form. This decision has significant implications for the Indian law regime, where cryptocurrency is now considered a virtual digital asset governed under Section 2(47A) of the Income Tax Act. The court granted an interim injunction against Zanmai Labs and its directors from interfering with or reallocating the applicant's 3,532.30 XRP coins, which were held on the WazirX platform.

Key Takeaways:

• The Madras high court has ruled that cryptocurrency can be treated as a property capable of being held in trust.
• The court held that the investment made by the user is converted into cryptocurrency, which is capable of being stored, traded, and sold.
• Cryptocurrency is now considered a virtual digital asset and is governed under Section 2(47A) of the Income Tax Act.
• The court granted an interim injunction against Zanmai Labs and its directors from interfering with or reallocating the applicant's 3,532.30 XRP coins.
• The applicant, Rhutikumari, had transferred funds from her bank account in Chennai to purchase crypto assets and accessed the platform from within India.
• The court observed that part of the cause of action arose within the territorial jurisdiction of the Madras high court.

Statistics:

• 3,532.30 XRP coins were held by the applicant on the WazirX platform.
• The applicant transferred funds from her bank account in Chennai to purchase crypto assets.
• The court granted an interim injunction against Zanmai Labs and its directors.
• The Singapore high court was supervising a three-step process for reconnecting user accounts after the WazirX hacking incident.

Sources:

• Madras High Court Order, dated 2023 (specific date not mentioned).
• Times of India, Chennai, 2023 (specific date not mentioned).
• "Rhutikumari vs Zanmai Labs Pvt Ltd and others" case file, Madras High Court.