Final legal clash between cryptocurrency exchanges, India’s central bank begins
The long-awaited day for India’s top most court to decide the future of cryptocurrency exchanges in the country has arrived. The outcome of the final hearing scheduled on Tuesday regarding the fate of cryptocurrency trading platforms will put an end to increasing uncertainty experienced by these exchanges.
Inception of the war
The clash between the Reserve Bank of India (RBI) and crypto exchanges started when the central bank restricted banks from offering services to companies dealing with cryptocurrencies. According to its directive, banks and financial institutions were required to terminate all professional relations with such exchanges in India.
Following the move, local exchanges unified and approached the country’s top court to seek relief from such stringent regulations. Unfortunately, the Supreme Court of India did not grant a stay on the RBI directive.
So why did RBI adopt such a harsh stance? For RBI, the security of its customers and investors comes first. It believes that investors are highly susceptible to cryptocurrency scams when dealing with cryptocurrency companies and exchanges.
The stand taken by the central bank has aligned with the Indian government, which has likened cryptocurrency scams to ponzi schemes. Concerns regarding crypto-based businesses getting involved in illegal activities such as money laundering and terror financing have also been raised.
Case made by local crypto exchanges
However, local crypto exchanges have vehemently opposed RBI’s move by referring to Article 19 (1) (g) of the Indian constitution. The article states that all Indian citizens have the right to conduct any business, trading activity and occupation.
The exchanges are willing to accept regulations and scrutiny from regulatory bodies. However, they oppose a complete ban on their business since scams can occur at any place and through any occupation which deals with large amounts of money and investments.
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