India’s top court calls out the government over lack of crypto regulation

India’s Supreme Court has called out the central government for its long silence on regulating crypto while warning them that the legal vacuum is a breeding ground for misuse. On Monday, the apex court sharply questioned why no regulatory framework has been introduced to govern cryptocurrency in India.

This comes in when the biggest economies in the world are taking steps to regulate crypto and develop a working framework for investors. Recently, the US Senate voted to move ahead on stablecoin legislation, which marked a big win for the crypto industry. However, the European Union’s Markets in Crypto-Assets (MiCA) regulation is already in its implementation phase.

According to reports, a bench of Justices Surya Kant and N Kotiswar Singh made it clear that “banning crypto is not the solution, but regulation is urgently needed”.

The Bench highlighted crypto’s growing role in the global economy and noted that ignoring it would be akin to “shutting your eyes to ground reality.” They added, “We aren’t experts. Experts would examine it, but some steps to regulate it and keep an eye on it are necessary.”

Justice Kant reportedly referenced a two-year-old observation to the Attorney General. He had then said the government couldn’t regulate crypto due to its international nature. The Court now says that’s no longer acceptable. The court noted that the taxing of Bitcoin profits at 30% already signals a form of legal recognition. Meanwhile, if that’s the case, then why is regulation still missing?

Justice Kant, while addressing ASG Aishwarya Bhati, added that courts are now facing practical challenges in crypto cases. He stated, “Tomorrow, somebody will ask me, you please prove—what is the asset? How are we going to prove it?” The ASG responded that she would seek instructions from the Centre.

Indian investors have already seen the WazirX hack in the absence of regulations. The National Consumer Disputes Redressal Commission (NCDRC)rejected a class action filed by 40 individuals affected by WazirX’s alleged $233 million hack in July 2024. The NCDRC pointed out that cryptos are not recognized as legal tender or a permitted investment asset in India.

BitConnect fraud case heating up in India

The apex court resumed hearings in a case involving multi-state cryptocurrency fraud. The case centers around petitioner Shailesh Babulal Bhatt. He has been accused of abducting two employees of the now-defunct BitConnect platform in 2018 and allegedly extorting 2,091 Bitcoins, 11,000 Litecoins, and ₹14.5 crore in cash.

Bhatt has reportedly mentioned that his motive was to recover losses from his investment in BitConnect. During the hearing, the Court asked Additional Solicitor General Aishwarya Bhati for an update on the investigation timeline. The matter has been listed for further hearing on May 30, with the Central Bureau of Investigation (CBI) directed to complete further investigation by that date.

Back in 2018, Bitcoin was trading at $10,000 after hitting $17,000 in 2017. BTC price dropped to hover around the $3,000-$4,000 zone later in the year. However, Bitcoin is trading at an average price of $105,161 at the press time. BTC went on to hit its all-time high (ATH) of $109,114 on January 20, 2025.

The global digital assets market printed green indexes all around on Tuesday morning. Its cumulative market cap surged by more than 2% over the last day to stand at $3.33 trillion with a trading volume of $126 billion.

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