Key takeaways:
- The Supreme Court of India expressed strong displeasure at the central government’s failure to establish clear laws or regulations concerning cryptocurrencies.
- The Apex court highlighted the absence of an expert agency capable of investigating criminal cases related to cryptocurrencies.
The world of cryptocurrencies has been a topic of intense debate and scrutiny in recent years, and India is no exception. As the country grapples with the rapid rise in the popularity and adoption of digital currencies, the government has been tasked with formulating clear regulations to govern their use.
However, amidst the prolonged wait for comprehensive guidelines, the Indian Supreme Court has stepped in, issuing a stern rebuke to the Union Government for the continued delay in implementing crypto rules.
The Indian Supreme Court has instructed the Union government to record whether or not it wants to establish a federal agency to investigate crypto-related criminal offences, calling it “unfortunate” that the Centre still has no law or agency governing crypto.
“Unfortunately, you still don’t have any law,” justices Surya Kant and Dipankar Datta observed before questioning, “Do you have a national agency to understand these cases and investigate properly?”
The Indian Supreme Court has strongly urged the Union Government to promptly establish a legal framework to address cases involving cryptocurrencies.
During the court proceedings, the bench expressed deep concern over innocent investors falling prey to fraudulent activities in the absence of a capable national-level agency to investigate the complexities surrounding crypto transactions.
In a pointed remark directed at the additional solicitor general, Vikramjit Bannerjee, the court emphasized the necessity of a legislative mechanism to tackle the growing issue.
The bench acknowledged that it falls within the government’s prerogative to decide on the implementation of such regulations, but the lack of a robust mechanism hinders the investigation and prosecution of individuals involved in crypto-related crimes.
Highlighting the seriousness of the situation, the court drew a parallel between crypto-related scams and the notorious “Hawala” money transfer system. It emphasized that the country’s financial security is at stake as money is being siphoned off through these fraudulent schemes.
The court further questioned the responsibility to curb such malpractices, expecting the government to take proactive steps and provide effective solutions.
Despite the absence of clear crypto guidelines, the Indian government swiftly imposed crypto taxation laws in April 2022. These laws were introduced during a bullish market phase when India emerged as a significant crypto market, hosting several crypto unicorns and witnessing soaring trading volumes worth billions of dollars.
However, the hasty implementation of tax regulations had a drastic impact on the thriving crypto industry, leading many established firms to relocate from India due to the lack of regulatory clarity.
