Is it legal to trade cryptocurrencies in India: SC to Centre

The question was addressed by a bench chaired by Justice DY Chandrachud while hearing a petition by one of the accused in the GainBitcoin fraud, Ajay Bhardwaj, wanting the charges against him to be dropped.

The Supreme Court questioned the Centre on Friday if it is allowed in India to deal with cryptocurrencies such as bitcoin. The question was put by a bench chaired by Justice DY Chandrachud while hearing a petition by Ajay Bhardwaj, one of the suspects in the GainBitcoin fraud, wanting the charges against him to be dismissed.

“We would like you, as the Union of India, to place on record the regime as to bitcoin and cryptocurrency? Is it still an offence?” said Justice Surya Kant, who was also on the Bench, to Additional Solicitor General Aishwarya Bhati, who represented the Enforcement Directorate (ED).

The oral question came after Bhati informed the bench that the case includes 87,000 bitcoin transactions and that the defendant is refusing to cooperate with the inquiry despite the agency sending him many summonses.

The Supreme Court granted Ajay Bhardwaj anticipatory bail in August 2019, shielding him from coercive action and requiring him to pay Rs 1 crore as security. Bhati stated, in response to a question from the bench on the status of cryptocurrencies, “we will do that.”

“There are Direct Marketing rules, which they have contested,” there are Direct Marketing guidelines, which they have challenged. This scam involves 80,000 bitcoins which have a value of 20,000 crores. FIRs are registered all across the country. The victims are running into thousands and thousands of people whose money has been taken. They are trying to create this ruse of guidelines and regime.”

She asked the court to lift the arrest warrant’s stay of execution.

The court however directed that “conditional on the petitioner cooperating fully in the investigation, the ad-interim order restraining arrest shall continue till the next date of listing.” It further directed Bhardwaj to “appear before the Investigating Officer in the Directorate of Enforcement within two days and cooperate with the investigation by being present as and when called upon to do so.”

Setting the issue for a hearing on March 28, the court ordered the Investigating Officer to “file a fresh status report on or before 25 March 2022 indicating the progress in the investigation and whether there has been cooperation on the part of the petitioner-accused.”

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