Rhutikumari Vs Zanmai Labs Pvt. Ltd. (Madras High Court)
Madras High Court held that ‘crypto currency’ is a property which is capable of being held in trust. Accordingly, held that applicant is entitled to an interim protection under section 9 of the Arbitration and Conciliation Act.
Facts- This application has been filed under Section 9 of the Arbitration and Conciliation Act (for short, the Act) for an order of injunction restraining the respondents from interfering with the account/portfolio holding of the applicant to the tune of 3,532.30 XRP coins in the WazirX platform either by redistribution or apportionment or reallocation.
Conclusion- Held that “crypto currency” is a property. It is not a tangible property nor is it a currency. However, it is a property, which is capable of being enjoyed and possessed (in a beneficial form). It is capable of being held in trust.
Held that the virtual digital asset held electronically are meant to be held in trust with a fiduciary duty owed to the owners of such asset. If the asset is stored digitally on the WazirX platform and that because of a cyber attack, if the entire operation stood frozen, whether it can be held that the asset that was possessed by the applicant will stand eroded due to security lapse or security breach and such erosion can be validly spread across all users of the platform and more particularly when such breach did not take place in so far as the asset held by the applicant in a different wallet namely XRP Coins, is a matter to be adjudicated in terms of the agreement.
