The Supreme Court on Monday told that dealing with Bitcoin in India is similar to “dealing with a sophisticated form of Hawala business” as it ruefully expressed the fact that the Centre has thus far not presented a clear regimen on regulating virtual currency.
Observations of Supreme Court on Bitcoin Trading in India
Justices Surya Kant and N Kotiswar Singh made these observations while disposing of Shailesh Babulal Bhatt’s bail application, who the police had arrested for suspected illegal trade in Bitcoins.
The bench added that two years ago, while hearing a case pertaining to Bitcoin trade, it had requested the Centre to inform the court regarding the policy regime on virtual currency trade, but so far, it has not received any response.
Attorney General’s Submission on Bitcoin Trading
Attorney General senior advocate Mukul Rohatgi, representing Bhatt, argued that Bitcoin trading is not prohibited in India after the Supreme Court canceled a Reserve Bank of India circular, and that his client was arrested illegally.
Justice Surya Kant informed Rohatgi that while he himself does not know much about Bitcoin, the court has been explaining to the Centre that if there is a regulatory framework, then there will be no issue.
“All I understand is that there are some genuine Bitcoin and some are fake Bitcoin,” Justice Surya Kant said and told Rohatgi, “You see, trading in Bitcoin in India is like dealing with a refined way of Hawala business. There are no regulations at present.” Rohatgi said that Bitcoin has enormous value and one can walk into a showroom in a foreign country with just one bitcoin and buy a car.
“I checked on Sunday, the value of one Bitcoin was Rs 82 lakh,” Rohatgi said, adding that he too does not understand much about the trade.
ED’s Counter and Hearing Schedule of Supreme Court
Additional Solicitor General Aishwarya Bhati, who represented the Gujarat government and the Enforcement Directorate, informed the court that they would like to submit a detailed counter to the bail application because it was not just about the Bitcoin trade.
The court granted 10 days to the state and the ED to file its reply and listed it for hearing on May 19.
Bhatt has alleged that he was taken into custody by the police on August 14, last year, and that he has been in jail since. He had petitioned against the February 25 order of the Gujarat High Court rejecting his application for bail in the case.
Centre’s Position on Cryptocurrency Regulation
The Centre had told the highest court in January last year that it had still not decided upon a mechanism to control cryptocurrencies and actually investigate offences related to them.
On February 25, 2022, the Supreme Court requested the Centre to clarify its position on whether the trade in cryptocurrency using Bitcoin or any other similar currency is legal in India or not.
The Supreme Court was hearing a case pertaining to the quashing of several FIRs filed against a person for allegedly cheating investors all over India by luring them to trade in Bitcoin and promising them with good returns.
