The Reserve Bank of India (RBI) came out with a circular to ban cryptocurrency dealings in the country, by prohibiting the banks to de-authorize the cryptocurrency purchase with a directive to wind down all existing accounts by the first week of July. This has left many Indian Cryptocurrency Exchanges very left angry and helpless both, with the ongoing scenario.
In the wake of the RBI Ban, many cryptocurrency businesses in India came forward to file a petition against RBI to the Supreme Court, saying that there were no rules made and the central government never gave any red flags about cryptocurrency dealings in India.
However, the Supreme Court has not yet been able to give any respite to the Crypto traders. According to a May 17 order given by chief justice Dipak Misra,
“The petitioners shall be at liberty to submit a representation to the competent authority of RBI within two weeks hence which shall be dealt with in accordance with law,”
Now, India’s cryptocurrency ecosystem is in a worse dilemma as the next date for the hearing of the case in the Supreme Court is July 20, two weeks after the RBI deadline to close down all crypto-related bank accounts.
Kunal Barchha, director at court last month, said,
“The understanding is that this means that the ban will continue, at least for the time being. Businesses are getting affected due to this uncertainty and this phase will continue for a while,”
Anirudh Rastogi, managing partner at legal firm TRA Law, which has filed the petition for four exchanges in the supreme court said,
“Among the major grievances that these virtual currency exchanges have is that the decision had been taken by the RBI without taking their views into account,”
“And second, there shouldn’t be an industry wide-ban, instead it can be implemented on a case-to-case basis where it is seen that the firms are violating any of the norms,”
Most of these exchanges say that they adhere to the strict guidelines to ensure that there is no illicit activities such money laundering or cryptocurrency thefts takes place, and the meausures taken by them to self-regulate address several concerns raised by the RBI. Rastogi added, “Hopefully, the central bank will be able to see merit in the steps taken by the firms in the recommendations made,”
However, the other section of cryptocurrency exchanges in India has no hope from the central bank’s order as now. Head of another exchange, requesting anonymity
“Lot of firms are looking at launching or have already launched crypto-to-crypto trade (which allows customers to buy one cryptocurrency in exchange for another) to comply with the new RBI rule. Some others are also exploring to set up offices in other countries, so most exchanges have been looking at other options.”
Supreme Court has now also banned petitioners to file case in any of the other high courts against RBI on the subject of cryptocurrency. Dwaipayan Bhowmick, a lawyer who had filed a public interest litigation in the supreme court in November requesting that these currencies be regulated said,
“There were cases being filed in the Calcutta high court, Delhi high court, etc. So the RBI asked the supreme court to merge all the cases on bitcoin and other such currencies in order to save time,”
RBI To Supreme Court: No Public Interest Litigation on The Issue of Legality of Bitcoins