A public interest litigation (PIL) has been filed in the Mumbai High Court (HC) seeking instructions for the central government to enact appropriate laws to address the growing threat of cryptocurrencies and malpractices of trading platforms in the country due to lack of legislation and statutory authority
Framework laws for cryptocurrency trading: PIL in HC seeks directions to the Center
KAY Dodhiya
abbas.dodhiya@htlive.com
Mumbai: A public interest litigation (PIL) has been filed in the Bombay High Court (HC) seeking instructions for the central government to enact appropriate laws to address the malpractices of cryptocurrency trading platforms in the country , due to the lack of legislation and statutory authority.
The PIL affirms that it is essential to address this problem and to frame the appropriate regulation, legislation and enactment to address this growing problem; otherwise a huge financial scam on the scale of the recent value of the Karnataka government bitcoin scam โน10,000 crore, could occur if left unchecked.
The PIL presented by advocate Aditya Kadam highlighted the problems faced by investors whose rights are being violated and investments are at risk due to the absence of a claim redress mechanism, for the unregulated cryptocurrency business in the country. The PIL has also pointed out the ease with which anyone can create a trading platform, deceive investors with their hard-earned savings and use the funds, thus fraudulently obtained for committing fraud or even terrorist financing.
The PIL also claims that it was also a victim of such fraud in 2018. It adds that as the currently unregulated business is worth โน6,600 million, the amount of loss due to fraud would have a direct impact on state revenues, since there are no tax protocols.
Referring to a 2020 Supreme Court (SC) ruling, which annulled a circular from the Reserve Bank of India (RBI), which prohibited the trading of cryptocurrencies as there were laws to regulate them, the PIL states that the central government failed to formulate laws.
The PIL also claims that it had made a representation before various authorities and parties to the PIL on September 30, 2021 pointing out the problems of the cryptocurrency market but has not received any response to the representations.
By stating that this "complacent attitude" of the authorities has led it to approach the HC, the PIL has sought indications from the central government to protect the interests of citizens. The PIL is expected to appear at the hearing on Tuesday.
