Crypto Alert! SC Says Regulation Is the Way Forward

Breaking: Supreme Court Slams Centre Over Lack of Clear Policy on Bitcoin, Likens Trading to Hawala

In a sharp rebuke, the Supreme Court on Monday questioned the Centre’s continued ambiguity on regulating Bitcoin and other virtual currencies, warning that the absence of a clear framework could harm the economy.

A bench comprising Justices Surya Kant and N. Kotiswar Singh compared Bitcoin trading to hawala transactions, pointing out the existence of a “parallel economy” that operates beyond regulatory oversight. The judges asked the government’s counsel why, despite repeated calls, no comprehensive policy or legal framework has been brought forth to govern cryptocurrencies.

The court’s remarks come in the wake of a 2020 ruling that overturned the RBI’s banking ban on cryptocurrency, which has since left the legal status of digital asset trading in a grey area. The lawyer for the arrested petitioner, Bhatt, argued that Bitcoin trading remains legal in India, referencing that same judgment.

Notably, this is not the first time the apex court has voiced concern. In February 2022, it directed the government to clarify its position on digital currencies—a demand that remains unmet.

As global attitudes shift, India is re-evaluating its crypto policy, with Economic Affairs Secretary Ajay Seth confirming that a long-delayed discussion paper is under review. With adoption growing despite heavy taxation, the stakes for India’s crypto future are higher than ever.

Let’s see how the Centre responds now, as Aishwarya Bhati, Additional Solicitor General of India, appearing for the government, has sought time from the court to file a detailed reply.

Author

Raj Gupta