India’s Highest Court Seeks Govt. To Clarify Whether Crypto Is Legal

Key Insights:

• Supreme Court of India has sought clarity on whether crypto is legal or illegal.
• The court was hearing a matter relating to the GainBitcoin scam.
• Despite market fluctuations and uncertain legal status, crypto-related crimes have been soaring in India.

The legal status of cryptocurrencies and their role in the national economy have always been unclear in India. Therefore, the Supreme Court of India has sought the government’s clarity on whether Bitcoin is legal or illegal.

Crypto Scams Raises Concern Over Its Legal Status

The move comes as the highest judicial court of India heard a case related to the GainBitcoin scam. The fraud has reportedly scammed 87,000 Bitcoins, approximately $2.64 billion.

The scam involved a ‘criminal conspiracy,’ cheating over 8K people in the Ponzi scheme that promised higher returns to Bitcoin investors.

The court has orally asked the government to shed light on the skepticism prevailing over crypto legal issues in India, a local press agency reported. 

A bench of justices told the additional solicitor general Aishwarya Bhati, “You have to make your stand clear.”

A Total Chaos on the Legality of Cryptos

The country’s Finance Minister Nirmala Sitharaman had given clarity on the taxation of digital assets during the Union Budget presentation 2022-2023. She had imposed a 30 percent tax on gains made on crypto-related activities.

However, questions and confusion have erupted on whether cryptocurrency is a legal tender in India. Especially after the country’s de facto bank Reserve Bank of India’s deputy governor, T Rabi Sankar, called for a crypto ban.

He laid out various threats to the country’s banking and monetary system when cryptos were put in use. He also noted that cryptos undermine KYC/AML and CFT regulations and threaten India’s financial sovereignty.

“Banning cryptocurrency is perhaps the most advisable choice open to India,” the deputy governor stated at the time.

Meanwhile, ministers and union members of the parliament have clearly stated that Bitcoin or cryptos can “never be a legal tender in India.”

Finance Secretary T V Somanathan said earlier this month that cryptos are similar to gold and diamond and, despite being valuable, “are not a legal tender.”

“Crypto will never be a legal tender. Legal tender means, by law, it is accepted in the settlement of debts. India will not be making any crypto asset as a legal tender. Only ‘Digital Rupee’ of the Reserve Bank will be a legal tender in India,” Somanathan clarified in an interview with the Press Trust of India.

Another union minister Bhagwat Karad also had a negative stance on legalizing cryptos. He said digital assets are not legal, and nothing could be predicted at present about the future of cryptos in India.