Crypto as Inheritable Property: Reading the Madras High Court Judgment and Its Probate Implications

The Judgment

On 25 October 2025 (delivered 1 August 2025, per the reported judgment date), the Madras High Court, in Rhutikumari v. Zanmai Labs Pvt. Ltd. & Ors. (O.A. No. 194 of 2025; neutral citation 2025:MHC:2437), delivered the first clear Indian judicial pronouncement holding that cryptocurrency constitutes "property" under Indian law. Justice N. Anand Venkatesh held that while cryptocurrency is intangible and not legal tender, it possesses the essential characteristics of property - capable of being enjoyed, possessed in a beneficial form, and capable of being held in trust. The Court granted interim protection under Section 9 of the Arbitration and Conciliation Act, 1996 to an investor whose XRP holdings on the WazirX exchange had been frozen following a 2024 cyberattack, directing preservation of her holdings and requiring the exchange to furnish security for their value. The Court drew support from foreign authority, including a New Zealand High Court decision recognising cryptoassets as property, situating the Indian position within a broader, converging global trend.

Why "Property" and "Held in Trust" Are the Words That Matter for Succession

The judgment arose in a commercial dispute over a frozen exchange account, not a succession dispute - but its reasoning has direct and immediate relevance to private client practice, because Indian succession law (the Indian Succession Act, 1925; the Hindu Succession Act, 1956; the Indian Trusts Act, 1882) is built around the concept of property capable of being owned, transferred, bequeathed, and held in trust. A judicial finding that cryptocurrency meets that threshold - capable of ownership, capable of being held in trust - provides, for the first time from an Indian court, a reasoned basis for treating crypto holdings as part of a deceased person's estate, transferable by will and holdable by an executor or trustee in the same conceptual framework as any other asset.

What This Clarifies for Private Client Practice

Crypto holdings can, and should, be expressly addressed in a will. Before this judgment, practitioners drafting wills for clients with cryptocurrency holdings worked with genuine legal uncertainty about whether such holdings were even a form of "property" capable of testamentary disposition in the conventional sense, as opposed to a contractual or purely technical claim against an exchange. The Madras High Court's characterisation supports drafting crypto bequests with the same confidence as any other asset class - while still requiring the practical mechanics (discussed below) that make such a bequest actually executable.

Crypto can be held in trust for a beneficiary. The judgment's explicit finding that cryptocurrency is "capable of being held in trust" supports structuring family trusts that include cryptocurrency among their corpus - relevant for families wanting to manage volatile or technically complex digital asset holdings for a minor or financially inexperienced beneficiary through a trustee, rather than transferring the asset outright.

Exchange-held assets carry a fiduciary/custodial character. The Court's reasoning treated the exchange (WazirX/Zanmai Labs) as holding the investor's assets in a custodial, fiduciary-adjacent capacity - relevant for executors dealing with a deceased's exchange accounts, since it supports the position that the exchange does not itself own the crypto assets credited to a user's account and must ultimately account for them to the rightful owner or that owner's estate.

The Practical Problem the Judgment Does Not Solve: Access

A court recognising cryptocurrency as inheritable property does nothing to solve the single biggest practical obstacle in crypto succession: private keys, seed

phrases, and exchange account credentials typically die with the account holder

unless deliberately preserved and transmitted. Unlike a bank account, where an executor can approach the bank with a death certificate and succession documentation to obtain access, a self-custodied crypto wallet with no recorded seed phrase is, as a practical matter, permanently inaccessible once the holder dies - no court order can recover keys that exist only in the deceased's memory or on a device no one else can access. Even exchange-held assets, while legally recoverable in principle, require the executor to actually identify that the holdings exist in the first place - crypto holdings, unlike a bank account, generate no annual statement mailed to a family member, and a family unaware an account exists has no natural trigger to look for it.

What Proper Digital Asset Estate Planning Now Requires

• An explicit inventory of digital assets, maintained separately from the will itself (for security reasons - a probated will becomes a public document) but referenced in the will or in instructions to the executor, covering which exchanges and wallets hold assets, without necessarily recording the access credentials in that inventory itself.

• A secure, separately held mechanism for transmitting access - a sealed instruction held by a trusted person or professional (a lawyer, for instance), a secure digital vault service, or a multi-signature wallet structure requiring a designated family member's key alongside the deceased's - designed so that access survives the holder's death without the credentials being exposed to theft during the holder's lifetime.

• Express testamentary language bequeathing digital assets, naming the specific exchange accounts or wallet categories where possible, and explicitly empowering the executor to take all steps necessary to access, value, and distribute or liquidate the holdings - anticipating that exchanges may require probate documentation, KYC verification of heirs, and potentially their own internal succession process before releasing assets.

• Periodic updates, given how quickly individuals' crypto holdings, exchanges used, and wallet structures change relative to the rest of a typical estate.

The Broader Point

Rhutikumari is a significant doctrinal marker - the first Indian court to say clearly that cryptocurrency is property capable of being owned and held in trust - and it meaningfully strengthens the legal basis for including crypto in wills and trusts with the same seriousness as any other asset class. But it is a starting point for the legal characterisation question, not a solution to the practical access problem that has always been, and remains, the central risk in crypto succession: an asset with no next-of-kin notification, no paper trail, and no recovery mechanism if the access information is lost. The judgment answers "is this asset inheritable?" cleanly. It does not, and cannot, answer "will your executor actually be able to find and access it?" - that remains entirely a function of the planning done while the holder is alive.