Supreme Court of India Asks the Govt to Clarify if Cryptocurrencies are Legal or Not SC Asks the Centre to Clarify the Legality of Cryptocurrency

The Supreme Court (SC) of India recently asked the Union government to clarify its stand on the legality of cryptocurrencies such as bitcoin. Hearing a case involving 87,000 bitcoins and thousands of investors in a Multilevel Marketing (MLM) scam, a bench of the apex court asked this question to the Additional Solicitor General Aishwarya Bhati.

What is the Case?

As per the Enforcement Directorate (ED), Amit Bhardwaj was running a multilevel marketing (MLM) scheme called GainBitcoin until his arrest in March 2018. As per the fraud, GainBitcoin promised a 10% monthly return on bitcoin investments. At the time of his arrest, the scam money was estimated to be Rs. 2000 crore (approximately $260 million).

But at the current bitcoin price, ED estimates the scam money to be worth Rs. 20,000 crore (approximately $2.9 billion). ED has charged Bhardwaj with opening a slew of companies and diverting investors’ money to them.

The SC granted bail to Bhardwaj in April 2019 and restrained the ED from any coercive action against the accused. On Friday, the top court heard a petition from one of the indicted Ajay Bhardwaj, also the brother of Amit Bhardwaj, that the charges against him should be dismissed.

What Did the Supreme Court Say?

Additional Solicitor General Aishwarya Bhati, who appeared for the ED, opposed the dismissal of charges against the accused and told the court that the case involved 87,000 bitcoins. She also said the accused was not cooperating with the investigation. Despite issuing summons, the accused had not appeared before the agency to help the investigation, she informed the court.

To this, Justice Surya Kant asked Bhati, “We would like you, as the Union of India, to place on record the regime as to bitcoin and cryptocurrency. Is it still an offense?”

In response, Bhati said, “We will do that.”

Detailing that numerous cases are lodged against the accused all over the country, the law officer asked the court to vacate the stay on his arrest. The Supreme Court, however, wanted the accused “to appear before the Investigating Officer in the Directorate of Enforcement within two days and cooperate with the investigation by being present as and when called upon to do so.”

The court said, “conditional on the petitioner cooperating fully in the investigation, the ad-interim order restraining arrest shall continue till the next date of listing.”

Why Did the SC Ask for the Crypto Legality?

In the absence of a clear legal framework, cases involving cryptocurrencies are dealt with under different laws. For example, the GainBitcoin case against the Bhardwaj family is being pursued under the Prevention of Money Laundering Act (PMLA).

Related:  Bitcoin and Ethereum camp go haywire as on-chain metrics reveal...

Because of a lack of expertise in cryptocurrency investigation, ED couldn’t conclusively prove that tainted money was converted into untainted money. This led the court to grant bail to the accused and restrain the enforcement agency from coercive action against him.

India’s central bank, the Reserve Bank of India (RBI), had banned cryptocurrencies in 2018 by asking banks not to provide regular banking services to crypto transactions. However, the Supreme Court of India struck off the RBI order in early 2020, primarily because no existing law makes them illegal.

After the April 2020 SC order, the RBI’s approach to cryptocurrencies became lenient, making it possible for crypto firms to secure funding.

In response to a case filed by the Internet and Mobile Association of India (IAMAI), which also represents crypto exchanges, the RBI in January 2021 clarified that bitcoin is not banned in India.

More recently, the Indian government, in its budget proposals for 2022-23, levied a steep 30% tax on crypto profits and 1% on all such transactions. But it didn’t clarify whether digital assets are legal or not, deferring the decision for the future to be taken after “consultations.”

 


Download MAXBIT Android App, Your best source of all crypto news!

Google Play

Source link

Share this article: