CryptoNews

India’s Top Court Slams Lack of Crypto Regulation, Links Bitcoin to Hawala

India’s top court just ignited a regulatory firestorm, slamming bitcoin trading as refined Hawala and blasting government delays that leave the crypto market in legal limbo.

Indian Supreme Court Calls Bitcoin Refined Hawala, Decries Absence of Regulatory Framework

The Supreme Court of India compared bitcoin trading to “a refined way of Hawala business” on Monday while expressing frustration over the central government’s failure to enact cryptocurrency regulations, PTI reported. The observation came during a bail hearing for Shailesh Babulal Bhatt, who is facing prosecution linked to bitcoin transactions. Justices Surya Kant and N Kotiswar Singh emphasized that the lack of regulatory clarity poses significant risks, stating:

Trading in bitcoin appears to be a sophisticated form of Hawala. In the absence of regulation, it raises serious concerns.

Senior advocate Mukul Rohatgi, representing Bhatt, argued that trading in cryptocurrencies is not unlawful under current Indian statutes. He referenced the Supreme Court’s 2020 ruling that struck down a Reserve Bank of India (RBI) circular that had barred banks from supporting crypto-related services. Rohatgi maintained that his client’s transactions fell outside the scope of any legal violation. Despite this, the court highlighted the government’s prolonged inaction in drafting a comprehensive regulatory framework. The bench criticized the delay as a contributor to legal ambiguity and potential exploitation within the digital asset ecosystem.

The apex court instructed the Gujarat government and the Enforcement Directorate (ED) to respond within 10 days and scheduled the next hearing for May 19. The matter revisits a 2022 directive in which the court asked the Indian government to clarify the legal status of cryptocurrency trading. Since then, although proposals and consultations have taken place, no legislation has been passed. While concerns over misuse persist, voices within the crypto industry continue to push for transparent regulations rather than prohibition. Industry advocates argue that policy clarity is essential to unlocking innovation while maintaining financial oversight.

While India lacks a formal regulatory framework for cryptocurrencies, it played a key role in advancing global discussions on crypto regulation during its G20 presidency in 2023. Finance Minister Nirmala Sitharaman led the push for a comprehensive regulatory roadmap, created in collaboration with the International Monetary Fund (IMF) and the Financial Stability Board (FSB). This roadmap, formally adopted by G20 members, highlights the need for coordinated international policies and better data collection. Meanwhile, the country imposes a 30% tax on profits from trading virtual digital assets (VDAs) without allowing deductions for losses or expenses. Additionally, a 1% Tax Deducted at Source (TDS) applies to crypto transactions exceeding a certain amount annually.

Source: Bitcoin

Related posts
AI & RoboticsNews

Lightricks just made AI video generation 30x faster — and you won’t need a $10,000 GPU

AI & RoboticsNews

Meet the new king of AI coding: Google’s Gemini 2.5 Pro I/O Edition dethrones Claude 3.7 Sonnet

AI & RoboticsNews

AWS report: Generative AI overtakes security in global tech budgets for 2025

Cleantech & EV'sNews

Popular high-power electric bike brand announces shutdown

Sign up for our Newsletter and
stay informed!

Share Your Thoughts!

This site uses Akismet to reduce spam. Learn how your comment data is processed.