The Supreme Court of India has called Bitcoin trade a ‘refined way of doing hawala’. The apex court was hearing a bail application of one Shailesh Babulal Bhatt, who was arrested for supposedly participating in illegal Bitcoin trade.
The bench comprising of Justices Surya Kant and N Kotiswar Singh made these observations even as they pulled up the Indian government for its lackadaisical approach in not formulating a policy on virtual digital assets yet.
Justices Surya Kant and N Kotiswar Singh were hearing the matter that was being argued by Mukul Rohatgi, a senior advocate representing the accused. Rohatgi argued that Bitcoin trading is not illegal in India, especially after the Supreme Court struck down an earlier RBI circular on the matter. He went on to add that the coin has enormous value and one can walk into a showroom in a foreign country and buy a car with just one Bitcoin.
To which Justice Surya Kant said that he understands is that there are some genuine Bitcoin and some are fake Bitcoin… But trading in Bitcoin in India is similar to a more sophisticated version of the Hawala system, especially since there are currently no regulations in place.
Hawala transactions are an informal payment system in India used allegedly for money laundering purposes. India currently maintains a tough stance on cryptocurrency with a 30% trading tax on any sale with a profit margin.
While both the bench and the council agreed that they had limited knowledge on the subject, they threw the ball in the government court stating that the Centre had still not informed the court about its regulatory stance. The court has given the state government and the ED, the prosecutors in this case another 10 days to respond and scheduled the next hearing for May 19.
