Crypto Crackdown: S.C. Rejects Plea For Regulation Of Digital Currencies In India

The Supreme Court of India has dismissed a petition that sought to regulate the trading and transactions of cryptocurrency in the country. The petition, filed by a man accused of duping investors in a crypto scam, claimed that the lack of legal framework for digital currencies threatens national security and the economy.

The petition was heard by a bench presided over by the Chief Justice N.V. Ramana who asserted that the matter did not lie within judicial interference as the petitioner was seeking redress in the legislative domain. Moreover, in the bench the petitioner, Manu Prashant Wig, is currently charged under the Section of defrauding 133 individuals by rupees.

According to a report, the Supreme Court raised suspicion about this PIL’s intention and doubted whether he was seeking bail. The bench noted that the petitioner did not tell them about the involvement in the criminal case, and he also did not approach the other authority before going to court first.

Meanwhile, a petitioner in judicial custody has requested directives from the court to the government and RBI to design frameworks for trade and dealings of cryptocurrencies in India. He had asked for a prohibition against cryptocurrency use in illicit deeds, including protecting investor’s rights.

The petitioner argued that India does not recognize cryptocurrencies as legal currency and highlight on them being vulnerable to hacking, stealing, fraud and money laundering. Further, he stated that cryptocurrencies could finance terror, sabotage an economy, and assist in tax evasion.

Crypto Regulation In India: A Grey Area

The petition comes at a time when the legal status of cryptocurrencies in India is unclear and uncertain. A year earlier, in 2018, RBI had issued a circular barring banks and other financial institutions from dealing with crypto-related entities. A Supreme Court decision of December 2020 had termed the circular disproportionate and unconstitutional.

Although over eight million people use various crypto platforms, and all their activities happen in India alone. However, the government has not yet introduced any specific law or regulation for the sector, leaving it in a regulatory limbo.

In 2019, the government introduced a bill prohibiting private crypto in India and introducing digital rupee as the sole official currency. The government has said there might be a more measured way of regulating crypto and allowing exceptions for innovations and research purposes.

However, the Indian crypto community has urged the government not to take a narrow view of the technology but to consult the stakeholders before developing any relevant policy. It also highlights the possible benefits of digital currency to the economy, like new jobs, innovations, and financial inclusivity.

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