Post RBI’s virtual ban on cryptocurrencies wherein it gave banks a time-frame of three months to implement the decision by cracking down on trade of virtual currencies in India, the cryptocurrency exchanges are now looking to challenge the central bank’s decision in India’s supreme court.
“We are looking at filing a petition to challenge the RBI’s order. At the moment we are working on it and trying to figure out if we should get together with the other exchanges and do it collectively,” the head of a cryptocurrency exchange told Quartz, requesting anonymity. An another anonymous head of another cryptocurrency exchange, too, said that the legal route was being explored. do something before the right time
The exchanges believe that RBI has taken rolled out its orders before the right time wherein its is too early in India for cryptocurrency to become a normal.
“It has come with this overarching order that can be challenged on several counts,” said Anirudh Rastogi, managing partner at law firm TRA that represents several bitcoin exchanges in the country. “There is a right to trade and it cannot be restricted in absolute terms. Only reasonable restrictions can be imposed and applied but a complete prohibition as restrictive as this was unnecessary.”
Rastogi added that perhaps the RBI’s motive was to safeguard the economy and investors against money laundering and terror financing, but a complete crackdown isn’t the only way to achieve it.
It is to be noted that Indian government hasn’t banned digital currencies. As a matter of fact, a committee has been set up under Subhash Garg, secretary of economic affairs in the finance ministry, to prepare a draft law on virtual currency, which is likely to be submitted by March 2019.
Under these circumstances, players in the Indian virtual currency ecosystem believe that the RBI’s crackdown was not justified.
It is also to be noted that with the increased popularity of bitcoin and other cryptocurrencies, fraud and crimes involving the same have too increased over the time and then started what could be called as the last resort — knocking on Supreme Court’s doors.
The Game of Cryptocurrency PILs in The Supreme court
In November 2017, the first ever Cryptocurrency related Public Interest Litigation (PIL) was brought before the Supreme Court in by Mr. Vijay Pal Dalmia Advocate, by way of Writ Petition filed under Article 32 of the Constitution seeking a ban on sale and purchase of cryptocurrencies including bitcoin, litecoin etc in India. The said Writ was ordered by Apex Court to be treated as a representation and Reserve Bank of India was directed to examine the same and communicate its decision on the representation within a specified time. However, the RBI instead of clarifying its stance on the issue evasively responded while giving information about the appointment of Inter-Disciplinary Committee by the Ministry of Finance.
Thereafter, the same Petitioner filed another PIL seeking that cryptocurrencies and all the platforms including mobile applications, websites etc. sued for sale and purchase of crypto, be declared as illegal. Just after this, another PIL was filed by Dwaipayan Bhowmick seeking the regulation of Bitcoin and other cryptocurrencies in India. The petitioner also mentioned the difficulties faced by the investors and it was prayed to the Supreme Court that the Cryptocurrencies should either be regulated by a legal framework or it should be completely banned.
The aforesaid PILs are pending adjudication before the Supreme Court since November 2017 and surprisingly the Government has not disclosed its stance before the Supreme Court whether it is in favor or against the Crypto ecosystem.
In a recent development, the Internet and Mobile Association of India (IAMAI) has also filed an impleadment application in the ongoing litigation praying that since the outcome of the decision of Supreme Court will have a bearing on its interest, therefore, it should also be allowed to advance its stance in the issue. There is strong likelihood that the new RBI notification severing fiat-crypto ties will be challenged in the Court of Law. So now the parties with competing interests are face-to-face before the Supreme Court, a gavel stroke of which will decide the future of cryptocurrencies in India.
It is to be noted that cryprocurrencies’ startups association em>Digital Asset and Blockchain Foundation of India (DABFI) had announced its merger with IAMAI in November 2017.