The Centre has told the Supreme Court that it is yet to take a decision on a mechanism to regulate cryptocurrencies and effectively investigate related offences. A bench of justices Surya Kant and KV Viswanathan was told by Additional Solicitor General Vikramjit Banerjee, appearing for the Centre, that the issues related to the digital currency are continuously evolving and the government is deliberating on the mechanism to regulate the cryptocurrencies .
Government seeks more time to file affidavit
He sought time to file an affidavit by the next date of hearing in the case giving updated position on the mechanism. “So far as the stance of the Union of India with reference to the matters of cryptocurrency arising in different states is concerned, the Additional Solicitor General of India seeks and is granted four weeks’ time to file an appropriate affidavit,” the bench ordered on Friday .
Court emphasizes need for appropriate safeguards
During the hearing, Justice Kant said the court only wants that there are appropriate safeguards to protect the common man from frauds and misuse of cryptocurrencies. “We are not experts on what kind of currencies you should have or regulate. If there is no mechanism to regulate it, then anyone can create a currency and start transacting in it. It will be very dangerous,” the bench told Banerjee .
ASG assures deliberations are going on
The ASG assured that deliberations are going on but it’s an evolving question and he will file an affidavit giving details of it on the next hearing of the matter. The bench posted the matter for further hearing on March 21 .
Case related to cryptocurrency fraud
It was hearing a bail plea of one Ganesh Shiv Kumar Sagar booked for cryptocurrencies fraud in various states like Jharkhand, Maharashtra and Gujarat. He has also sought clubbing of various FIR lodges against him in different states. The top court made the interim protection from arrest granted to him on July 27, 2023 as absolute after counsel for the Jharkhand government submitted that he has joined the probe into the case and fully cooperating with the investigating officer. The counsel for Sagar submitted that he undertakes to continue to appear before the Investigating Officer as and when required till the investigation reaches a logical conclusion .
Background of crypto regulation in India
The Supreme Court had earlier rejected a Public Interest Litigation (PIL) seeking to establish a regulatory framework for cryptocurrency trading in India. The court, led by Chief Justice D. Y. Chandrachud, dismissed the plea, stating that the demands of the petition were more legislative in nature and not within the judiciary’s purview .
The PIL had sought directions to frame guidelines or regulations for crypto exchanges, wallets, miners, traders and other stakeholders involved in dealing with virtual currencies. It had also sought directions to ensure compliance with anti-money laundering laws, consumer protection laws, taxation laws and other relevant laws by crypto entities .
The crypto industry in India has been facing uncertainty and confusion over its legal status and future prospects. The government had earlier proposed a bill to ban all private cryptocurrencies and create a digital rupee as a legal tender. However, the bill has not been tabled in Parliament yet and its contents are not known .
Meanwhile, crypto exchanges and platforms have been operating in India with self-regulation and compliance measures. According to some estimates, there are over 10 million crypto investors in India with a total market value of over $15 billion .