Supreme Court of India
Supreme Court of India
stands by RBI restrictions levied on cryptocurrency. The Court denies to grant interim injunction appealed by Indian crypto enthusiasts. In a circular rolled out by Reserve Bank of India (RBI), banks are restrained from providing services to crypto companies
. On 11th May, 2018, Crypto Kanoon confirms the stand of Supreme Court by posting on Twitter.
Crypto Kanoon is a group comprising Indian lawyers. The team is inclined towards legal awareness and analysis pertaining cryptocurrency in India.
Earlier, RBI circular created agitation among the companies dealing with cryptocurrencies. 11 representatives from different crypto companies unanimously approached the Supreme Court of India. Their motive has been to file a petition against RBI order. They wanted an intervention by the top-most Court of India. They expected that legal intervention would help them to receive an interim injunction on the RBI order.
However, the Supreme Court of India denies the interim injunction against RBI circular. The status of the case continues to remain pending. The Court has given the next date for hearing the case on 17th May, 2018.
The legal connotation of an interim injunction is the prevention of injustice during the procedure of a trial. In case of an interim injunction, a party is either restricted from performing certain acts or ordered to do those acts.
In April, the regulated banks of India received an order from RBI to “immediately suspend their services.” The banking services’ suspension is directed only to the companies favouring digital currencies. The decision of RBI was not welcomed. All the quarters of the nation, supporting the use of cryptocurrency, agitated. The circular affected the banking services towards the start-ups and companies dealing with cryptocurrencies.
According to the circular of RBI, “it has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs [virtual currencies] or provide services for facilitating any person or entity in dealing with or settling VCs
. Such services include 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
The RBI circular is followed by an anticipatory remark made by Tim Draper, a Tech investor. He has anticipated that the crypto entrepreneurs and companies would now go abroad. Draper has supported the stand of Prime Minister of India against corruption. But he could not agree with the government for not giving cryptocurrency the status of a legal tender. He termed it as “a huge mistake” by the Indian government.
Previously, few Chile-based cryptocurrency exchanges made an appeal to the court. The appeal was against the nationalised banks’ decision to close all accounts. The exchanges including Orionx, Buda, CryptoMarket complained about unnecessary intervention of the banks in Chile. The exchanges stated that the banking system was ““killing the entire industry.”
Indian government has been apprehensive about the use of bitcoins and other cryptocurrencies. The Indian government, promoting and implementing anti-corruption measures, believes this industry is susceptible to money laundering acts. Earlier, RBI also warned crypto enthusiasts in India to deal with digital currencies at their own risk and responsibilities.