Supreme Court Supports RBI Decision to Ban Indian Crypto Services
The Reserve Bank of India bans all crypto services carried out through Indian banks
As explained by a set of lawyers in India, the Indian Supreme Court turned down a request to issue a temporary order against restrictions put by the central bank on other banks related to digital currencies. The Reserve Bank of India (RBI) published a circular putting a halt to all Indian crypto services. This will be active at least till a formal hearing takes place in the court.
Indian Supreme Court turns down the injunction
The set of lawyers in India known as Crypto Kanoon look into the regulations and legal awareness in the crypto space. They have kept an eye on the Central Bank of India, Reserve Bank of India and the related circulars demanding banks to halt any Indian crypto services being carried out. Those who were against the ban hoped the injunction would allow banks to serve the clients dealing with cryptocurrencies in the regular way as before the ban.
On 11th May 2018, the Supreme court turned down the interim injunction enforcing the continuation of the RBI ban. This decision was a drawback for the Indian crypto community. However, this procedural decision will not affect the outcomes of the petition for relief as this is temporary. On 17th May 2018, the case will return to the Indian Supreme Court once more.
As stated in the circular published by the Reserve Bank of India in April 2018, it orders, “with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs [cryptocurrencies] or provide services for facilitating any person or entity in dealing with or settling VCs.”
The scope of the ban is somewhat comprehensive and includes, “maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer / receipt of money in accounts relating to purchase / sale of VCs.”
Community push back of Indian crypto services
The person behind this petition is Dwaipayan Bhowmik of West Bengal requesting the government to regulate digital currencies including Bitcoin core. The request mentioned galvanizing several ministries from India’s Securities and Exchange Board (SEBI) to Reserve Bank of India (RBI). Regional media quoted Bhowmik as hoping, “to prevent financial crimes such as money laundering, flesh trade, etc.”.
In India, the judicial appeal process allows petitioners to appeal together regardless of their advocacy. Two petitioners in this case, one wanting ban and other wanting government recognition. In Bhowmik’s case he insists he does not fall onto either category and just wants Indian crypto services to be regulated.