XRP gets legal recognition as 'property'

Can you call your digital assets “property”?

For many countries, cryptocurrencies and tokens still occupy a regulatory gray area as governments continue to understand how these assets function. However, some nations have taken decisive steps toward legal clarity by recognizing crypto as property.

Classification of digital assets as "property" strengthens ownership rights and brings them under existing tax frameworks.

In the United States, the Internal Revenue Service (IRS) treats virtual currencies like Bitcoin (BTC) and XRP as property for federal tax purposes, making them subject to capital gains tax when sold, exchanged, or spent.

The United Kingdom’s courts have similarly recognized crypto as a form of personal property, allowing for remedies such as injunctions, tracing, and asset recovery in cases of fraud or theft.

Singapore’s High Court has also affirmed that digital assets are “property capable of being held on trust,” granting them protection under civil law.

Now, India has joined these ranks, setting a new precedent in the country’s legal and regulatory landscape.

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Court qualifies crypto ownership

In a landmark decision, the Madras High Court, on Oct. 25, ruled that cryptocurrencies such as XRP qualify as “property capable of being possessed and held in trust,” formally recognizing them as a distinct form of property under Indian law.

XRP is a cryptocurrency used primarily for fast and low-cost cross-border payments. It runs on the XRP Ledger (XRPL) — an open-source, decentralized blockchain network developed by Ripple Labs Inc., a fintech company based in San Francisco.

The decision arose from a petition filed by Rhutikumari, a WazirX user whose 3,532.30 XRP, worth approximately $9,400, had been frozen following the exchange’s July 2024 hack.

WazirX is one of India’s largest cryptocurrency exchanges. Founded in 2018 by Nischal Shetty, Sameer Mhatre, and Siddharth Menon, the platform allows users to convert Indian rupee (INR) to crypto.

In July 2024, a hack into the exchange drained around $235 million in assets. The crypto exchange introduced a  “socialization of losses” plan to spread the financial damage across all user accounts.

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Story Continues

However, Rhutikumari challenged the move, arguing that the exchange’s actions violated her property rights over her XRP holdings.

While WazirX claimed that its restructuring plan had been sanctioned by a Singapore High Court and therefore fell outside Indian jurisdiction, the Madras High Court rejected this argument. It held that since the petitioner funded her account via an Indian bank and accessed the platform domestically, the case constituted a valid cause of action under Indian jurisdiction.

Justice N. Anand Venkatesh of Madras High Court delivered an interim ruling affirming that digital assets like XRP are intangible yet ownable property, not speculative instruments. The court concluded that cryptocurrency ownership can attract legal protection equivalent to other property classes.

As interim relief, the court prohibited Zanmai Labs, WazirX’s Indian operating entity, from reallocating Rhutikumari’s XRP and ordered it to issue a bank guarantee of roughly $11,500.

Related: WazirX to restart on October 24 with 0% trading fees

Why the ruling matters

India currently lacks a comprehensive crypto regulation framework, but digital assets are taxed under the Finance Act of 2022, which classifies them as Virtual Digital Assets (VDAs).

The government imposes a 30% tax on profits from crypto transactions, with no deductions or loss offsets allowed, and a 1% tax deducted at source (TDS) on transfers above Rs 10,000 ($112.79) to monitor trading activity.

The Madras High Court’s ruling provides India’s crypto investors with unprecedented legal clarity. For the first time, holders can assert ownership rights over their digital assets, protecting them from arbitrary exchange actions or restructuring losses.

For exchanges, the decision may force revisions to user agreements and custody frameworks, as tokens held on behalf of users are now treated as protected property rather than collective pool assets.

Despite its significance, the ruling remains an interim order and applies specifically to Rhutikumari’s frozen 3,532 XRP. Broader legal certainty will depend on subsequent judgments and legislative action.

At the time of writing, XRP was trading at 4.9% lower at $2.18.

Related: XRP at ‘make or break’, crypto analyst reveals new Christmas target

This story was originally reported by TheStreet on Nov 7, 2025, where it first appeared in the Policy section. Add TheStreet as a Preferred Source by clicking here.

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