The Supreme Court reportedly observed that the issue of regulation for cryptocurrencies in the country must be taken up in consultation with experts. According to a Bar and Bench report, a bench of Justice Surya Kant and Justice NK Singh addressed the lack of crypto regulations in India. The observation was made during the hearing of a case linked to a rise in crypto frauds across multiple states. Additional Solicitor General (ASG) Aishwarya Bhati will reportedly submit the government’s position on cryptocurrency by July.
As per the report the bench emphasised need for both regulatory measures to govern the crypto sector and oversight.
Justice Kant reportedly told the ASG that in the absence of regulations, courts have been facing practical challenges, with regard to crypto cases.
For instance, the justices said were facing a difficulty in assessing if the plaintiff was the victim or victimiser in the crypto fraud case. For now, the Central Bureau of Investigation (CBI) has been asked to complete the probe in this case by May 30.
In November 2023, the Supreme Court rejected a petition seeking clear guidelines to oversee crypto trading in the country. That bench was headed by former Chief Justice D Y Chandrachud. At the time, the bench had deferred the petition blaming the petitioner for trying to seek bail from proceedings that were pending then.
Between 2022 and 2025, India has gradually introduced layers of legislationsn to govern some parts of the crypto and Web3 sector.
India has been taxing crypto gains by 30 percent since 2022. The finance ministry also levied one percent TDS on all crypto transactions in order to maintain a trail of crypto transactions, that are otherwise largely private and even anonymous.
Crypto firms operating in the country have been mandated to comply with anti-money laundering rules and KYC collection guidelines. In addition, every firm offering services related to digital assets in the country have to obtain a registration from the Financial Intelligence Unit (FIU) to make their operations legal.
A crypto discussion paper from the finance ministry is due for release. In February, RBI Governor Sanjay Malhotra said that this discussion paper will bring more clarity around virtual digital assets in the nation.
The discussion paper will guide the future of the country’s cryptocurrency sector, Economic Affairs Secretary Ajay Seth had claimed in July 2024.
Meanwhile, Finance Minister Nirmala Sitharaman previously said that India’s position on crypto is that they cannot be currencies.
Former RBI Governor Shaktikanta Das had also expressed concerns around cryptocurrencies during the World Economic Forum last year, but the RBI’s 2024 Financial Stability Report acknowledged the global expansion of digital financial systems and highlighted blockchain’s significant implications for the financial sector.
