The Supreme Court of India has expressed its disappointment over the government's failure to develop a comprehensive policy on cryptocurrency regulation, as reported by The Economic Times on Monday. Justices Surya Kant and N Kotiswar Singh pointed out that the absence of a clear policy has led to the emergence of a 'parallel under-market' for cryptocurrencies, which can have far-reaching consequences for the economy. The justices questioned why the government has not introduced a clear-cut policy to regulate cryptocurrencies, emphasizing that such regulation would enable the authorities to monitor trade activities.
Justice Kant likened the unregulated Bitcoin trade to an illicit 'Hawala business,' which is a term used to describe the informal transfer of money without the physical movement of funds, an activity that is prohibited in India. The justices posed this question to Additional Solicitor General Aishwarya Bhati while hearing a bail petition filed by Shailesh Babulal Bhatt, a resident of Gujarat who has been accused of crypto-related fraud. Bhati claimed that Bhatt was one of the largest BTC trade aggregators in Gujarat, deceiving others with promises of high returns.
However, the court was unable to determine whether Bhatt was a perpetrator or a victim due to the government's inability to establish a clear regulatory framework for cryptocurrencies. The Indian government had planned to release a discussion paper outlining its stance on crypto policy by September last year, but this has yet to materialize. A senior official attributed the delay to plans to review the impact of more crypto-friendly policies implemented in the U.S. under President Trump.