Big Crypto Fraud Update: In a significant development, the Supreme Court has highlighted the need to regulate cryptocurrencies in the backdrop of several instances of fraud reported in related technologies in several states. Stating that banning or restricting the use of cryptocurrencies is not a viable option to address the problem, the top court stated that crucial steps are needed to ensure stern surveillance on such technology.
Justice Surya Kant and Justice NK Singh said that the court is no expert in the matter, directing an expert investigation into the matter.
Blocking cryptocurrencies completely from the economy is not an intelligent solution to this problem, given that there is no suggestion so far to completely ban these securities.
The imposition of a 30 per cent tax on Bitcoin trading is in a way legal validation of such virtual currencies, said the bench.
Under the current tax laws in India, earnings arising out of trading in virtual digital assets (VDAs)—or cryptocurrencies such as Bitcoin—attract a 30 per cent tax. Meanwhile, the Union Budget for 2025-26 introduces stricter tax norms and guidelines for taxpayers engaged in cryptocurrency trading.
Bitcoin News | Why cryptos not regulated if they are already recognised, says top court
“If cryptocurrencies are already being recognised by the system, then how come they are not regulated yet?” asked the bench.
The courts are facing practical challenges in dealing with matters related to cryptos, said the judges.
The top court will hear the matter further on Friday, May 30.
Cryptocurrency News | RBI’s tough stance against cryptos
The banking regulator has time and again cautioned the public against the use of virtual currencies (VCs), with a stern warning that dealing in such currencies is associated with potential economic, financial, operational, legal, safety, and security-related risks.
It has also advised regulated entities to stay due diligence processes for transactions in virtual currencies, in line with rules laid out under Know Your Customer (KYC), Anti- Money Laundering (AML), Combating of Financing of Terrorism (CFT), Prevention of Money Laundering Act (PMLA) and Foreign Exchange Management Act (FEMA) laws.
Meanwhile, the finance ministry has also stated that any legislation for regulation or for banning cryptos can be effective only with significant international collaboration with thorough evaluation of the associated risks and benefits.
It has also maintained that given cryptos’ global operability, countries need to cooperate with one another to create consistent rules and prevent people from exploiting loopholes in different regulatory systems.
