The Supreme Court of **India** recently likened Bitcoin trading to a modern form of illegal money transfers known as Hawala. This comparison was made during a bail hearing for Shailesh Babulal Bhatt, who was accused of engaging in illegal Bitcoin trading. The judges also criticized the Indian government for not establishing clear regulations for cryptocurrencies yet.
During the hearing, the bench remarked that “Trading in Bitcoin appears to be a sophisticated form of Hawala. In the absence of regulation, it raises serious concerns.” This statement highlights the need for regulatory clarity in the crypto space.
In a previous case, multiple FIRs were filed against an individual for deceiving investors with promises of high returns from Bitcoin trading. The court had requested the government to clarify its stance on cryptocurrencies, but there have been no significant updates since then.
Senior lawyer Mukul Rohatgi, representing Bhatt, argued that Bitcoin trading is not illegal in India, citing a previous Supreme Court decision that overturned the RBI’s circular restricting banks from dealing with cryptocurrencies.
Justice Surya Kant emphasized the importance of clear rules to prevent confusion in the crypto market, even though he admitted not fully understanding how Bitcoin functions. He pointed out the need for regulations to distinguish between genuine and fake Bitcoins.
The Gujarat government and ED requested more time from the Supreme Court to respond to the case, which extends beyond Bitcoin trading. The next hearing is scheduled for May 19, with Bhatt currently in jail since August 2023, appealing a previous bail denial.
While India has taken some regulatory steps, such as imposing a 30% tax on crypto profits and bringing virtual asset transactions under the Prevention of Money Laundering Act in March 2023, a more comprehensive regulatory framework is still required to govern the crypto industry effectively.
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