India’s Supreme Court says Bitcoin trading is like a refined Hawala network

The Supreme Court of India has raised concerns about unregulated trade in Bitcoin, comparing it to a refined form of Hawala during a recent release audience under bail in a case linked to the crypto.

According to local mediaThe observation came while the court questioned the absence of a clear regulatory framework for virtual currencies in the country. The bench, including the Surya Kant and N Kotiswar Singh judges, said that the lack of formal rules concerning cryptographic assets had created uncertainty, leading to potential improper use.

The remarks were made during the release on bond of Shailesh Babulal Bhatt, who has been in detention since August 2023 for having allegedly adopted the illegal trading of Bitcoin.

During the hearing, Bhatt’s lawyer, the main lawyer Mukul Rohatgi, argued that the Bitcoin trade is not illegal in India, especially after the Decision in 2020 of the Apex Court This canceled the ban on the Bank of India reserve on banking services for cryptographic platforms.

Judge Surya Kant replied that his understanding of Bitcoin is limited, but stressed that, without regulation, trading of Bitcoin is closely like “a refined way of Hawala”.

For those who do not know, Hawala is an informal, often illegal money transfer system that operates outside traditional banking channels.

The bench also noted that it was not the first time that the question arose in court. In particular, in a similar case two years ago, the court specifically asked the center to clarify its policy on virtual currencies.

The case in question dates back to February 2022, when the Supreme Court was hear a petition To cancel several FIRs deposited against an individual accused of having dupe of investors via a Bitcoin program.

However, Kant said that there has been no progress since. The absence of any update, despite repeated calls for clarity, left the judiciary in a difficult position when he dealt with such questions, he hinted.

Despite continuous uncertainty, India has taken some measures towards monitoring virtual digital assets. A tax regime introduced in 2022 imposed a 30% tax on the profits of cryptography and a 1% tax deducted at source on all transactions higher than a certain threshold.

Beyond taxation, virtual asset transactions have been introduced under the money’s money laundering prevention law in March 2023. Many platforms, including Binance, Kucoin and Coinbase, have since been registered with the India financial intelligence unit to comply with local rules.

However, a wider regulatory framework remains absent. In December 2024 answer In Parliament, the government said that there was currently “no fixed calendar” to introduce complete rules on virtual assets.

As before covered On Crypto.news, Ajay Seth, secretary of the Department of Economic Affairs, addressed the delay in the publication of a discussion document on cryptocurrency, originally Scheduled for September 2024During a recent political round table.

With significant savings like the United States revisiting its position on the crypto, following political changes under President Trump, Seth said that India should also reassess its approach.

“We were ready with a discussion document, but we must now recalibrate it because of these changes,” said Seth at the time.