Author: Sugnana Mary from St. Joseph’s College of Law

Decentralized Assets and The Law: A Critical Analysis of CryptoCurrency as “Property” Under The Transfer of Property Act, 1882

ABSTRACT

Cryptocurrencies have witnessed an exponential rise and are gaining prominence as an investment and trading instrument, but  the legal framework around the world has yet to catch up to the dynamic nature and legal definition. In India, cryptocurrency usage is on an upward curve but yet no concrete legislative framework is present to establish their legal ownership, even though the asset is being traded as commodity and has a market value. The legal gap created in identifying the nature of the asset has caused ambiguities with respect to rights of ownership and transfer of asset, inheritance rights, taxation issues and the procedures for their enforcement and Dispute Resolution mechanisms in case of a wrongful claim on these assets. The paper delves into the conceptual framework under the Transfer of Property Act, 1882 in an effort to ascertain the position of cryptocurrency as ‘property’ under the Indian statute in the absence of any express legal definition. It aims to identify the various legal properties that could potentially assign ‘property’ status to a cryptocurrency and analyzes the legal characteristics of cryptocurrency, including the Information Technology Act, 2000,  Prevention of Money Laundering Act 2002, the Finance Act 2022, and the Constitution of India. It also examines relevant judicial interpretations in India with reference to legal frameworks of other countries. Based on the doctrinal method of legal research, using primary and secondary sources, the paper argues that a cryptocurrency satisfies the general criteria for property such as being transferable, exclusive in nature, valuable in property law and therefore, despite the absence of an explicit classification in Indian law, there exists a viable legal foundation for interpreting cryptocurrency as property and therefore, calls for clear legal declaration for the best outcome to prevent property related disputes.

 Keywords: Cryptocurrency, Transfer of Property Act, 1882, Property Law, Virtual Digital Assets (VDAs), Blockchain Technology, Indian Constitutional, Ownership Rights, Transferability of Property, Ruthikumari case. 

1. Introduction

1.1 Evolution of Property Rights in India:

In relation to property the legal system of India was originally developed under the regime of English common law and rules made by judges, to provide clarity in Transfer of Property Act 1882, which came into force on 1 July 1882. The purpose of the law is to regulate the manner in which property may be transferred from one individual to another.

1.2 Intangible property creation:

The property rights, which until now were recognised by the law relating mainly to tangible, now intangible, the Indian legal regime over the time has acknowledged various rights as Property (e.g. including the intellectual property and Goodwill). 

Thus it may be said that a broad range of interests can be interpreted by property as in article 300A. 

1.3 Emergence of New types of digital assets:

Digital assets include software, domain names, and cryptocurrencies. They’re considered digital rather than physical assets, meaning they do not have a physical presence. Crypto currency is a decentralized type of digital currency created using blockchain technology, with Bitcoin being the first example appearing in 2009. The growth and increasing popularity of cryptocurrencies occurred across the globe and particularly within India throughout the 2010. The Reserve Bank of India (RBI) became increasingly concerned about the potential financial and regulatory risks associated with cryptocurrencies, resulting in the RBI publishing a circular in 2018 prohibiting regulated financial institutions from providing services to businesses involved in transactions regarding crypto currencies. However, the Supreme Court of India overturned the RBI’s circular, removing this prohibition for any entity involved with cryptocurrencies, thus creating numerous questions surrounding the acceptable type or class of transaction that can be referred as a cryptocurrency in India i.e., whether these types of assets will be treated as currency, goods, security, or property.

The paper reviews whether cryptocurrency can be classified as property as it relates to transfer of property by using India’s Transfer of Property Act, 1882. The evolution of property law in India is reviewed and analyzed in relation to the treatment of digital types of property. Both international and Indian law regarding crypto-currencies is also reviewed and discussed. The focus is whether existing provisions under the TPA or other laws can include Cryptocurrency or whether legal reforms are necessary to provide legal certainty.

2. Background of the Issue

The characteristic of cryptocurrency is that it is a digital token registered to a distributed ledger (also known as the blockchain). This digital token is considered to have value and is able to be exchanged electronically. In relation to legality, cryptocurrencies are not legal tender within India and are not issued by a state but exist only as private digitally created assets. For example, in considering Bitcoin, The Supreme Court of India explained that it “falls into the ranges of property, commodity and non-traditional currency.”

2.1 Crypto Adoption in India: 

The legal status of cryptocurrencies is not entirely clear yet many crypto trading platforms are operating successfully and cryptocurrencies have been classified as virtual digital assets (VDAs) for tax purposes, leading to the continued growth of cryptocurrencies among the general public. However, some banks and financial institutions have issued warnings against buying/ trading in cryptocurrency, indicating continued regulatory uncertainty about how cryptocurrencies will be treated by the financial systems in India.

Main characteristics of cryptocurrencies are decentralised, pseudonymity, immutability (once sent, cannot be reversed) and the use of the private key (like a password) to access funds. Cryptocurrencies are intangible (they exist only in the form of data) but can be traded or used as a payment method if both parties agree. They don’t have a physical presence and are not governed by a central authority and their values fluctuate wildly.

2.2 Challenges in Legal Classification: 

Classifying specific features creates legal issues. Crypto currency does not meet the definition of “money” as per traditional currency regulation so it does not apply. In addition to not being physically accessible, crypto currency can still be redeemed for goods and services. Another question exists as to the classification of crypto currency under Indian law, is it classified as a movable asset, commodity or some other category? This classification influences tax laws, contract laws, property laws and regulatory enforcement.

2.3 Lack of Clarity on the Legal Status of Cryptocurrencies in India: 

The legal status of cryptocurrencies in India remains ambiguous due to the absence of a clear definition in the existing statutory framework. Consequently, several legal issues remain uncertain for individuals holding cryptocurrencies, including whether cryptocurrency can be classified as property and be subject to seizure (for e.g. in case of fraud), whether it can be inherited, and whether it can be transferred as property. These important issues will ultimately depend on future judicial decisions and the interpretation of existing laws concerning the terms “cryptocurrency” and “property.”

3. Research Problem and Objectives

The research aims at knowing if Cryptocurrency, and any other digital assets, can be legally classified as “property” under the Transfer of Property Act, 1882. Some of the key aspects which will be considered are; how do cryptocurrencies compare with the legal standards established by Indian law, particularly regarding the definitions of movable property or actionable claims? It examines these provisions in consideration of the characteristics of cryptocurrency. The definitions provided in other legal documents, such as parts of the Constitution, specifically Article 300A, as well as legislation that is related to property are also considered.

The objectives of this research include:

• Analyzing Indian statutes and case law to see how these laws and courts currently treat crypto-assets.
• Comparing how cryptocurrencies are treated internationally (according to FATF and UNCITRAL guidelines).

• Identifying gaps in legal regulations that result from the way that cryptocurrencies are classified and the impact on ethics, practical aspects of those classifications in relation to cryptocurrency.
• Developing recommendations for reforms in both law and policy to provide greater clarity in the legal status of cryptocurrencies.

4. Constitutional and Statutory Framework Governing Cryptocurrency in India

4.1 Constitutional Provisions

• Article 300A: The Right to Property is no longer treated as a fundamental right, however, Article 300A remains an avenue for protecting “property” in the Constitution (i.e. One cannot be deprived of their property without law). Indian Courts have interpreted Article 300A to protect both tangible and intangible property such as copyrights and patents. Therefore, if cryptocurrencies are deemed a form of property, they would also be entitled to constitutional protection against arbitrary deprivation.
• Article 19(1)(g): Right to Trade is guaranteed by Article 19(1)(g), a blanket prohibition on blockchain trading could be challenged under Article 19(1)(g) if the trade ban could not be justified. This was the issue in IMAI v. RBI (2020) where the Supreme Court found that preventing banks from doing business with crypto exchanges was a violation of reasonable restrictions and therefore, was deemed disproportionate.
• Article 14: Equality before the law may come into play if crypto users allege they have been treated differently than similarly situated individuals. Courts have already applied arguments using Article 14 to invalidate other blanket bans that were not supported by precedent. 

4.2 Legislation

• Transfer of property Act,1882:

In the Indian legal system, there are many applicable laws regarding property transfers. The TPA 1882 is a wide-ranging statute that governs transfers of property. While it does not define property, it does define different types of property that are transferred. Example, Section 3(26) defines “immovable property” to include land and fixtures. Anything that is not included as “immovable property” is classified as “movable property.” Section 6 of the TPA provides that all property may be transferred unless prohibited by law. As a result, the definition of property may also include intangible assets such as digital assets, including cryptographic currencies. Since there is no specific provision in the TPA prohibiting the transfer of digital assets, it can be reasonably assumed that the terms of Section 6 will be applied by the courts to classify cryptographic currencies as “property.”

• The Indian Contract Act, 1872:

 Regulates contracts for the sale of goods and other contracts. Section 2(7) of the Sale of Goods Act, 1930 defines “goods” as “movable property,” while excluding the value of money. Since cryptographic currencies are not considered as currency, therefore, excluded from this definition of goods, some legal analysts argue that cryptographic currencies should be classified as “goods” for the purposes of the Sale of Goods Act. Regardless of whether cryptographic currencies are classified as “goods,” if they qualify as “property,” then contracts for their sale or transfer would be valid. 

• Information Technology Acting 2000 (IT Act): 

This law mainly pertains to addressing matters regarding electronic records as well as security issues concerning these records and defines what an “electronic signature” means. These definitions do not apply specifically to the regulation of cryptocurrencies. However, provisions in the IT Act, such as provisions that address computer hacking may be applied to acts of digital currency theft. Criminal provisions in the IT Act, such as the identity theft provision in section 66C and the property theft provision in section 66B, could potentially apply in cases of keys used for accessing digital currencies being stolen. In summary, while it is not specifically applicable to cryptocurrencies, provisions found in the IT Act have the potential to apply to matters related to cryptocurrencies.

The IT Act is an Indian law that primarily deals with issues related to electronic records and electronic transactions. The IT Act does not specifically mention cryptocurrencies. However, some sections of the IT Act (sections on computer hacking/unauthorized access) relate to crimes involving digital assets and would apply in the case of a cyber attack on your cryptocurrency wallet or private keys.

• Finance Act, 2022 [ Income Tax Provisions]:

The 2022 Finance Act added new rules to the IT Act specifically for Virtual Digital Assets, which includes Bitcoin, Ethereum, and NFTs. These are defined as digital tokens or codes that represent value and can be exchanged online. Under Section 115BBH, any profits made from transferring these assets are now taxed at a rate of 30%, a rule that started in April 2022. By setting up these tax requirements and making people pay tax at the source during a transfer, the law is essentially treating crypto as a type of capital asset. While the tax code does stop just short of officially labeling crypto as property in a strictly legal sense, these changes mean the government now recognizes it as a taxable asset. 

• The Bharatiya Nyaya Sanhita:

The BNS which replaced the Indian Penal Code, 1860, came into effect on July 1, 2024. Even though the BNS, as a whole, hasn’t delved into crypto or digital assets specifically, any offence concerning these could be prosecuted under laws related to cheating, fraud and breach of trust. Furthermore, the IT Act of 2000 would be in effect if the case involves cyber crimes. RBI,SEBI have been wary of crypto over the years, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have cautioned against crypto assets. 

In 2018, the apex bank, the RBI, imposed a ban on crypto businesses providing banking services, but the Supreme Court scrapped the order in 2020. In the meantime, the RBI continues to remain cautious towards crypto pushing for India’s indigenous digital currency. Currently, India’s legal framework is a tight trope walk. While cryptocurrencies have been declared Virtual Digital Assets and come under the scope of anti-money laundering laws, they still have not found an official mention in terms of the legal definition of ‘property’. 

5. International Legal Framework Relating to Cryptocurrency

• FATF Recommendations on Virtual Assets: 

In 2019 FATF updated its global standards to include “virtual assets” and “virtual asset service providers”.  FATF recommends countries apply Anti-Money Laundering / Counter-Terrorism Financing (AML / CFT) regulations for the  exchanges and custodians of cryptocurrencies similar to banks. It does not necessarily require classification of crypto as property, but ensures that crypto should be treated similarly to any other asset when the asset or underlying is exploited for financial crimes, as seen in FATF’s travel rule and KYC requirements. India has adopted several FATF recommendations through its regulations by imposing requirements such as registering crypto exchanges with the FIU and reporting suspicious transactions.

• Financial Action Task Force (VASPs Guidance):

FATF released specific guidance regarding VASPs and information sharing through the transfer of crypto-assets, keeping in line with general principles of information exchange related to property transfers. Although this guidance is non-binding, this sets an internationally accepted framework that governments have started following.

• OECD Crypto-Asset Reporting Framework (CARF):

In 2023, the OECD came up with the global tax framework for crypto-assets named the Crypto-Asset Reporting Framework (CARF) which calls for the exchange of tax information between jurisdictions concerning crypto-assets, building on the Common Reporting Standard for financial accounts. This framework considers all crypto-assets to be similar to financial accounts from which information can be shared. This solidifies the view that cryptocurrencies need to be monitored and regulated just like any other assets which generate income or gains as property. 

• MiCA Regulation – The European Union:

In June 2023, the Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114 was adopted in Europe, creating a European crypto framework. The MiCA regulation brings unified crypto law and regulations for all EU crypto issuer and service providers. The regulation addresses a range of unregulated crypto assets and imposes certain requirements relating to transparency of such assets, investor and consumer protection and the authorization and conduct of all exchanges dealing with such assets.

MiCA is unclear about the definition of “property” – by regulating crypto transactions, crypto exchanges etc., MiCA treats crypto similarly to financial assets, from a legal standpoint, a whitepaper and other protections provided suggest that offers, and holdings in crypto assets would be akin to securities or investment products. 

• UNCITRAL Model Laws:

The United Nations Commission on International Trade Law (UNCITRAL) has tackled electronic and digital assets in a more general fashion. For instance, UNCITRAL enacted a model law that recognizes electronic transferable records: UNCITRAL Model Law on Electronic Transferable Records (2017) “consecrates and renders legally effective” certain digital records a bill of lading, a letter of credit, a promissory note, etc. “as the electronic equivalents of paper records.” UNCIRTRAL’s recognition of digital property rights, even those represented digitally-as property indicates a recognition that physical possession is not necessary for ownership of an asset. In addition, UNCITRAL published Guide on Legal Issues Relating to Distributed Ledger Technology in January 2025 to address commercial law issues raised by DLT. 

Though UNCIRTAL’s models are not legally binding, they suggest international efforts to incorporate digital property into law and represent the development of “good practices.” 

6. Judicial Precedents and Case Laws

• Indians Internet and Mobile Association of India v. RBI 2020 10 SCC 1:

In this significant Supreme Court decision, the RBI’s April 2018 circular that banned banks from servicing crypto businesses was overturned. The Supreme Court called cryptocurrency an ‘innovation’ and indicated that Bitcoins are indeed “property, Commodity, currency”. Crucially, the Court noted that this isn’t ‘illegal’ money, and the RBI could regulate without resorting to a total ban. Although this judgment does not engage with the nuances of the Transfer of Property Act, it at least takes note of crypto transactions being legal trades. 

Other high courts and tribunals over the past decade, various other Indian high courts and tribunals have encountered cryptocurrency issues indirectly in ancillary matters related to anti-money laundering seizures, bank dispute arbitration cases, and others. For instance, in co-accused seizures, that occur during investigations/enforcement agency cases, etc., crypto assets have been viewed either as attachable assets or something exchangeable for rupee. Yet, as of this document writing, it is unaware of any Indian judicial decision settling the question of crypto ‘property’ until 2025.

• Rhutikumari v. Zanmai Labs 2025:

 A recent Madras High Court judgement had gone a step ahead. The Court has expressly held that cryptocurrency  is a property which can be held in trust. This happened when it was dealing with the case of a hacked crypto exchange (WazirX), where the Hon’ble court stated that Cryptocurrencies as virtual digital assets as defined under Section 2(47A) ITA, can indeed be property of their rightful owners, held in trust for them. 

• Ion Science Ltd v Persons Unknown & Ors (England & Wales, 2021): 

The High Court made injunctions in relation to stolen Ethereum, and in terms of property. The judge concluded, even though the judgment is unreported, that “Ethereum tokens are capable of being property even though it is a form of property that is not tangible” and that “tracing orders against digital currency of that kind could be obtained”.

• Ruscoe & Moore v Cryptopia Ltd (NZHC, 2020): 

New Zealand’s High Court found that cryptocurrencies constituted intangible personal property that could be held in a trust. The decision concerned as liquidation of a cryptocurrency exchange and took guidance from the UKJT statement, finding that crypto tokens satisfy the definition of property, are more than information, and represent a property right, having been found to meet the various tests for property, namely that they were identifiable, transferable and had value.

• Quoine Pete Ltd v B2C2 Ltd [2020] SGCA(I) 2 (Singapore Court of Appeal, 2021): 

A breach of contract case in respect of a virtual currency exchange. The Singapore Court of Appeal confirmed that transactions occurring over a smart contract were to be governed by standard contract law. Though it did not expressly rule upon the question of crypto being property, it did grant tracing remedies in respect of such currency and its judgment could be read as suggesting that rights over tokens can be asserted.

• Tulip Trading Ltd v Bitcoin Association (2023) (UK Court of Appeal):

In a very recent decision regarding ownership of coins on the Bitcoin SV network, the UK Court of Appeal held that the Bitcoin SV developers had no proprietary interest in the network’s cryptocurrency users’ coins. The Court of Appeal did not directly rule on whether crypto itself constituted property, but the logic of the judgment could imply that the bitcoin users owned their coins, therefore making crypto an owned property.

The list of case laws clearly demonstrates a common law trajectory which views crypto as property it could be  tangible, intangible but nonetheless proprietary interest, and which has consistently granted proprietary remedies such as freezing orders, tracing orders against such assets on this basis. The persuasive force of these international authorities when considering the position in India is considerable. 

7. Legal Analysis: Whether Cryptocurrency Qualifies as Property under the Transfer of Property Act, 1882?

In effect, TP Act’s immovable property is defined as the land and things attached to it and by exclusion, everything else is ‘movable property’. Section 6 states, “Property of any kind may be transferred  unless given this wide definition, interests that are movable and can be transferred are theoretically covered including incorporeal interests if not explicitly prohibited in other sections. Crypto is not listed in any of the excluded interests or transfers under Section 6. 

Therefore, on its face, crypto would fall under movable property. Traditional property doctrine recognized both material and incorporeal goods,  a cryptocurrency has no physical attributes. Its existence is confined to the recording of information and its balance being just one entry of data . It is very similar to money, but it is not legal tender. However, it is clear that numerous incorporeal assets can be subject matter of property including debt, securities and patented intellectual property. 

The General Clauses Act, 1897 defining movable property has an inclusionary aspect including incorporeal property that Include things that pass from hand to hand including such things that although they are affixed to the earth, by a farmer who has attached it. Indian Law includes the mention of debt, bonds, shares, notes, bills, cheques etc, and the same can pass on as movable property. The Apex Court while adjudicating upon Article 300A on property had held that in the broader sense, property means and includes the right to possess , and that incorporeal rights would include copyrights etc.

Therefore it is quite possible for a Court to treat cryptocurrency as incorporeal, transferability of cryptocurrency as per TP Act, what may be transferred is property. So we need to identify what constitutes a transferable property under the law. One need to remember that what determines whether the cryptocurrency is transferable is its ability to be alienated. In simple terms, the property can be passed or delivered from one entity to another, a crypto owner does, in fact send crypto tokens from one address to another through on line transmission, thereby effectively giving rise to a transaction in the nature of sale and purchase or a gift among users which the cryptocurrency exchanges can also be associated with. If so transferred then a transfer within the scope of sec 6 should be possible provided nothing of the sort has already been debarred by other parts of the Transfer of Property Act. On identifying this a crypto transaction may very aptly be put at par to delivery in terms of any commodity or for that matter goods and commodities. 

The same should be recognised in accordance with Section 6 of the Transfer of Property Act. Section 6 of the TP Act does not mention anything concerning cryptocurrencies or their inability to be used as ‘transferred property’. The section mentions property that is prohibited from transfer and this does not seem to cover the circumstances of cryptocurrency. 

The crypto rights to be recognized as a property, then what rights would the owner have over this? This is of course, a major question. The right of property has been recognised as the legal relation between a person as holder and the object in the capacity of holder. Holding as an act has its own defining characterisation, which is essentially an appropriation from ‘no-person’ or from the rest of the world which is the rest of the world as holding the object not holding it. In other words, the holder owns an object in relation to the rest of the world. It means, it can be appropriate as its own, either on occasion or absolutely. On this basis, the owner has a right to possess the asset in issue which is effectively the possession of the wallet keys that allow him exclusive use.

On this he has an exclusive right to possess, use or dispose. In the context of crypto, such possession is virtual, with its attendant ownership. It gives to the owner an exclusive right to control the transfer of the cryptocurrencies. The New Zealand High Court (in re Gold) recognised that property interests are paramount in circumstances like theft, insolvency or claims on a deceased’s estate , where the claim on ownership of such interests would carry the same weight as that in a share certificate or other form of paper property. Thus, any claim regarding cryptocurrency under the ambit of Indian property law might arise in the case of the owner’s death, or where it is stolen, or if it forms part of a dispute on insolvency of a partner, for instance . In all these cases, the owner will be claiming ownership under this purported property right, not just a claim in contract or trust. 

Any asset which is treated as property needs to fulfil three core conditions: Identifiability; exclusivity; and valuability. Any token or a crypto unit has its identifiable attributes, an ability to provide exclusive use to a private wallet, an intrinsic market value on all cryptocurrency exchanges. Such assets like share certificates or bonds and more so such crypto assets have a fungible nature and are interchangeable like Bitcoins. 

The court in AA vs Person Unknown case regarded it as belonging to various categories, including property and granted property linked injunction to secure it , for the purpose of securing the proceeds from a transaction . These all are transferable property and could certainly stand to be identified within the broader ambit of sec 6 of TP Act. An intangible is regarded as property if it has economic value to its owner and is both exclusive and identifiable . Holding and using crypto is more similar to share holding debt of a bank account. Therefore, it can be safely assumed that crypto’s intrinsic characteristic has such a potential. The NZ High court in re Gold was the opinion that the digital asset has some characteristics similar to property. Challenges in the application of traditional legal concepts to cryptocurrency it is interesting to note that an account receivable is only available as personal protection, but a property protected right could arguably cover broader circumstances and provide more effective protection. In some cases this right exists independently from the claim in debt, thus creating an action in rem rather than just a claim in personam, whereas debt itself is classified as a choice in action. 

Crypto’s decentralized nature means that it is not tied to any central authority, no certificate of title or ownership, as it is usually the case with most shares of companies or similar paper. Yet, the mere fact that no physical document of ownership exists can hardly justify an exclusion of this property, as all intangible ownership like that of shares in companies and rights to a debt has similarly only been recognised with the advent of new technologies of their time. On the evidence of record and in many legal precedents the ownership can be traced using the private address on the blockchain, often facilitated by information obtained through various exchanges via know-your-customer processes. Therefore, such limitations if they exist should not create an issue of property law. 

The fact that the Blockchain is itself spread over many computers does not cancel its functionality and as a tool for the tracing and identifying property. The ability of the blockchain to store records of transactions in a distributed database and ledger forever will make it highly useful as a tool for establishing and identifying all types of incorporeal assets. Even though cryptocurrencies can have to be recognized by the government and as such, their value for enforcement must also be recognized. As the present law on this issue is very outdated and does not cover the virtual world so, for the purposes of identification and enforcement of property, a new property can be identified to make it easy and accessible for the citizen to trace and retrieve his lost or stolen assets. 

International jurisprudence and the common law jurisdiction have increasingly accepted the proposition of classifying crypto assets as property and a court in England and Wales has in the absence of specific legislative guidance, allowed a property-based freezing order to secure cryptocurrency. An Australian court did likewise to protect proceeds, a New Zealand court also recently confirmed that crypto could be an ownerless asset, though subject to equitable trust provisions. Indian courts are sometimes influenced by international precedents for innovative questions such as issues concerning trusts where the Madras HC relied on the English and U.S decisions on the subject. 

The complete volume of such evidence would seem to suggest the advisability of following such precedent and recognising cryptocurrency as an incorporeal moveable property to fall within section 6 of the TP Act. 

Conclusion:

Without express statutory clarification, cryptocurrency may not fall under the immediate definitions available for property, but keeping in view the wider connotation that the term ‘property’ is given in the Indian law and the global trends and jurisprudences concerning crypto assets one may conclude that crypto assets can indeed be recognized as movable, transferable property within the existing legal framework of the TP Act. The question of the exact classification of crypto assets under any other heading within section 6 should still need judicial consideration or may in the future, become subject to specific legislation. A recent opinion has said that crypto assets can potentially be classified as intangible movable property under Indian law, though specific legal recognition is still required. 

8. Critical Analysis And Impact Assessment 

If crypto were legally declared property, owners would receive clear rights of redressal. For example, if someone had their coins stolen during a hack, they could reclaim them through property law principles (as has been done in AA vs State of Manipur and Ruscoe vs Asquith LLP). The commentary states property status for cryptocurrencies allows investors to seek protection against theft and fraud and allows them to hold fiduciary responsibilities by exchanges if they store their coins for safekeeping. 

Property treatment for cryptocurrencies would also have an influence on contract law, corporate law. 

8.1 What are the regulatory challenges to recognising cryptocurrency as property? 

In India, there are very few crypto specific laws and in the event, they were declared property, the regulators would be compelled to adopt the existing regimes. For example, if a party were in possession of crypto during an investigation by the enforcement director, this could potentially be attached, much like real estate is seized and frozen by the agency, and as has recently happened in a case. If crypto is considered to be property, in cases such as seizure orders that may impact crypto holdings, since crypto is not listed on the law’s official registry such as patents,the implementation will lag. 

Financial regulators such as the RBI, SEBI, etc would have to understand the applicable statutes to cryptocurrencies, whether they be payment, securities, or even commodities. The Indian stance in this regard is likely to have implications in relation to the international coordination with other regulatory bodies, given that it is still being debated. With clarity over property rights for cryptocurrency in place, it will stimulate confidence among retail and institutional investors. It is even likely to improve innovation and the tokenisation of real world assets as these digital tokens will be clearly owned. 

Though on the flip side with clear recognition of rights will come stringent taxes, more oversight which might deter a section of the speculatory traders and institutional investors from investing as readily. With India’s extremely high taxes of 30% and additional TDS on crypto earnings, one is already made to treat it like another capital asset as the system reflects the de-facto approach. However, with the official property tag, India could well attract crypto businesses and in return may become more cooperative for tokenisation. On the contrary, with this will come inherent ethical consequences. Cryptocurrencies could potentially become too easily traceable for the governments and with crypto classified as property, law enforcement bodies might be able to trace and attach all crypto earnings. 

This would potentially mean violation of the privacy rights of investors or even those who use it as an alternate mode of payment. But, with the opposite implication this can result in protecting everyday investors against scams by treating their digital assets as property in which they have genuine claim over for legal recourse which is ethically a good thing. Furthermore, illegal acquisition of digital assets can be treated as theft or fraud, thereby enhancing its prevention on the societal front.

8.2 What will be the impact of recognising cryptocurrency as property on the consumers and investors? 

The general consumer or investor of crypto must have clarity of understanding on rights and redressal avenues. Many crypto investors in India may currently feel like there is no safety in place as foreign based exchanges may be shut down, leaving a gap, as no one will take responsibility. With cryptocurrencies recognized as property the law would be able to enable rights to consumers such as those provided in the Consumer Protection Act and  thereby holding these businesses more accountable, and even allow consumers to get their digital assets in a case of insolvency or file for a breach of contractual obligation to take possession over the asset by court order or sue for an injunction. The consumer protection norms would then become more robust.

8.3 How is this reflected in international cases?

Various countries including the United States of America, UK, Australia, and EU have all seized with defining digital assets and currently most jurisdictions have recognised cryptocurrencies as property or a similar asset. Singapore’s Monetary Authority recognizes virtual currency as the property of the account holders. Most jurisdictions around the globe treat virtual currency similar to property, and allow for owners to pursue claims based on the principles of property law, such as by making claims for stolen property under property law. 

Even in case of any bankruptcy, the cryptocurrencies of the consumer would also be included in their estate. The EU’s MiCA is more inclined to regulate them as a class of digital tokens. All of this points to a positive approach wherein cryptocurrencies are not outright banned and not necessarily recognised as legal tender but also as digital property which would offer a significant advantage. 

9. Contribution and the Findings

9.1 Bridging legal gaps: Although India’s property law text can be interpreted broadly to include crypto, there is no clear recognition. We identify this lacuna and assert that while the IT regime and enforcement actions recognize crypto as an asset class, it remains untested from a civil property law perspective. The paper points out that both TP Act and analogous legislative frameworks predate digital currency and therefore contain inherent ambiguities in this regard. It intends to fill this void by explicitly mapping the specific characteristics of crypto to the definitions within TP Act.

9.2 Evaluating current legislative framework: The paper provides a comprehensive evaluation of whether definitions within the Indian legal regime including the definition of goods in the Sale of Goods Act 1930 and the definition of actionable claim in TPA can accommodate crypto. Our findings conclude that both these definitions remain inadequate given the unique features of cryptocurrencies, an actionable claim typically covers a debt and not a token. It further demonstrates that the law of personal property from Hindu Succession Act to other provisions also has no recognition for intangible assets.

9.3 Proposing a working definition for cryptocurrency in the property law context: Based on the analysis of the current law and examination of international models, a definition of crypto for the property law context as- an intangible movable property, represented by a digital token, that confers a bundle of rights to the holder for the ownership, control, use, transfer, and accrual of benefits thereof, equivalent to traditional forms of property. This functional definition mirrors the one formulated for virtual digital assets (VDAs) in the Income Tax Act, extending it to cover property rights in cryptocurrencies. By devising this, it contributes a critical conceptual tool for courts and policymakers.

9.4 Application of TP Act and related concepts to digital assets: It examines each component of TP Act’s broad definition of ‘property’ in detail to determine the scope and application to digital assets and cryptocurrencies. This entails an analysis of principles relating to transfer of interests, vesting of future interests, condition precedent transfers, amongst others, in the context of cryptocurrencies. This includes examining if a crypto wallet could be held to be ‘property’ under trust law and the requirements that must be met for crypto contracts under TP Act. Additionally, it delves into the applicability and extensibility of Indian precedents relating to trusts, inheritance, and secured transactions to this emerging asset class.

9.5 Assessment of future legal developments: Forecast potential future legal path in light of possible legislative amendments for example, the implications if the forthcoming Bharatiya Nyaya Sanhita were enacted, especially concerning criminal prosecution or protection of crypto holders. It also projects the possible influence of global trends, like recommendations from international organisations such as the IMF and standards from the FATF, on the evolution of Indian law.

9.6 The innovative contribution in this regard is a predictive framework of legal change. It  does not only focus on the current legal landscape, but also on what the future of the legal framework could hold and make a case for whether a standalone ‘cryptocurrency law’ is needed or whether modifications to the existing property laws is sufficient. Overall the study enriches the existing discourse by offering a comprehensive property-law lens on the cryptocurrency domain, blending doctrinal investigation with critical policy analysis to provide original insights. 

10. Recommendations/ Suggestions

10.1 Statutory Regulation- Digital asset and VDAs are to be recognized as movable property under property law like Transfer of Property Act. We need a separate Crypto Asset Act which defines the term crypto, token as digital asset and sets its rules of transfer, custody, and inheritance of such assets. Then our tax and treaties will sync with the Property Law of India.

10.2 Regulation & Investor Protection- In the absence of legislative reforms, the regulator should step-up their game, RBI/MoF can issue clarifying notices to treat crypto holdings with exchanges as Trust properties for clients, as observed by Madras High Court in B.L. Gomes Vs. State of India. SEBI should classify crypto trading platforms as Financial Intermediaries in line with the regulation of REITs / InvITs. These actions would bring Crypto investors under the shelter of the trust/agency law in the country. The Consumer protection laws need to be modified as per need, like making fraud done by crypto exchanges a punishable offence.

10.3 Utilizing existing laws by Judicial interpretation- Crypto wallets can be treated as documents of title for virtual goods and could be recovered by way of warrant of delivery under CPC. Such Judicial activism can be seen on the same footing as has been followed by various Courts with respect to the law of negotiable instruments or in Sec 53A of TP Act in the matter of crypto. Courts can create an interpretation framework until amendment laws take place.

10.4 Amendments to property laws and succession- The Hindu Succession Act and Indian Succession Act should include digital assets so that cryptocurrencies would be inheritable under our existing succession law. Similarly, the law on insolvency and bankruptcy should clearly state that crypto assets would be included as a part of the estate of an individual being admitted to insolvency/bankruptcy proceedings. For example, there was a dispute concerning digital assets and the case mentioned by China v. Unknown in the USA where digital assets were not included in the will.

10.5 Harmonization with international standards- Indian crypto policies are to be in line with that prescribed by FATF, OECD and other global authorities. India has now a firm place in the reporting regime of OECD CARF and should consider joining more G20/IMF principles on crypto for global co-ordination and compliance. Parliament should also consider ratification of UNCITRAL’s model laws for electronic trading.

10.6 Non- legislative regulatory approach- Other non-legislative measures include bringing in a licensing regime for exchanges (as government plans), strict Anti-Money Laundering framework, and effective KYC of wallets to link them with identities to reduce the problem of anonymizing the crypto ecosystem and restricting their use in illegal activities. Clarifying crypto as a capital asset for taxation purposes is a step taken in the right direction to bring crypto into the economy. Public education can further increase awareness of risks and rights of crypto investors.

10.7 Proposed amendments- A possible amendment to TP Act would be to define digital asset or cryptocurrency as an electronically stored representation of value, which is electronically transferable or tradable, and may be held/ transferred by electronic means. Digital assets and VDAs are to be interpreted as movable property or an amendment to Sale of Goods Act wherein we can classify crypto as goods but not money. Law-makers will have to take great care in wording these laws to not over-regulate it.

11. Conclusion

In summary, there is a high likelihood, under Indian law, that cryptocurrency should be considered as movable property. The broad interpretation of property of any kind afforded under the Transfer of Property Act, the constitutional protection for intangible property, and India’s treatment of cryptocurrency in both tax and enforcement matters all contribute to this conclusion. Several countries’ judiciaries have recognized property in crypto, and it seems that the Madras HC’s decision (2025) indicates that India’s judiciary is following suit.

Until legislation recognizes cryptocurrency as property expressly, its nature remains ambiguous. Instead of case-by-case decisions, which carry with them, the results and uncertainty for users India needs clarity on the matter of crypto ownership. For once cryptocurrency is classified such ownership and possession can facilitate users ability to buy, sell and safely keep their virtual assets, ensure equitable treatment, enforce their contracts and deal with crypto assets in matters of succession and bankruptcy. Currently, cryptocurrency bridges a grey area the Indian state imposes tax on cryptocurrency transactions and uses mechanisms such as the PMLA to prevent their criminal use yet, has failed to place cryptocurrency in its rightful place under civil property law. Going forward, India needs to respond to the cryptocurrency phenomenon, not by dealing with crypto as merely tax and law enforcement concerns, but by classifying it as the legally cognizable type of property that we found it likely to be, either via legislation, declaration by India’s courts, or guidance by the regulator thereby putting to an end to any decisions and thereby ensuring clear rules that protect consumer interests and foster innovation for its future crypto landscape. India needs clear crypto property law, but the conversion from proposition to established fact can only come with a serious reform effort. 

12. References

1 Kumar, I. And Danu, P. (2025) Cryptocurrency as property and trust. https://vidhilegalpolicy.in/blog/cryptocurrency-as-property-and-trust/ ( 21 April 2026). 

2) Ahmed, S. And Sengupta, S. (2022) Blueprint of a law regulating cryptoassets. https://vidhilegalpolicy.in/research/blueprint-of-a-law-regulating-cryptoassets/ ( 21 April 2026).

3) Internet and Mobile Association of India v. Reserve Bank of India (2020) 10 SCC 274. https://indiankanoon.org/doc/34487423/ ( 21 April 2026).

4) Rhutikumari v. Zanmai Labs Pvt. Ltd. (2025) Madras High Court. https://indiankanoon.org/doc/34487423/ ( 21 April 2026).

5) Lee, L. (2024) Examining the legal status of digital assets as property: A comparative analysis of jurisdictional approaches. https://scholar.google.com ( 21 April 2026).

6) AA v. Persons Unknown [2019] EWHC 3556 (Comm). https://www.bailii.org/ew/cases/EWHC/Comm/2019/3556.html (21 April 2026).

7) Ion Science Ltd. v. Persons Unknown (2020) High Court of England and Wales. https://www.bailii.org/ (28 April 2026).

8) Ruscoe v. Cryptopia Ltd (in liquidation) [2020] NZHC 728. https://www.nzlii.org/ (28 April 2026).

9) B2C2 Ltd. v. Quoine Pte Ltd. [2020] SGCA(I) 02. https://www.elitigation.sg/ (28 April 2026).

10) Beretta, E., Demidenko, E. and Bernasconi, M. (2023) ‘The legal nature of cryptocurrency as property: Accounting and taxation implications’, Computer Law & Security Review, 50, 105865 https://www.sciencedirect.com/science/article/abs/pii/S0267364923000705 (28 July 2026).

11) Chan, T. (2023) ‘The Nature of Property in Cryptoassets’, Legal Studies. https://www.cambridge.org/core/journals/legal-studies/article/nature-of-property-in-cryptoassets/6B882C05BD3D9A7A924FBE41C359E92E (28 July 2026).