We missed this earlier.
On Monday last week, the Supreme Court has passed an order presenting the Central Government with a “last opportunity” to come out with regulation of cryptocurrency policy in India. After these 4 weeks, the SC will take a decision on the RBI’s cryptocurrency banking ban, Bitcoin.com said.
- In the SC’s previous order on 25 October 2018, the Supreme Court recognised that the Committee was in the process of formulating a policy, and asked for a timeline within which such a policy would be released.
- After scheduling two more hearings, the Court did not receive a response in this regard.
- The SC is not waiting for a response to this deadline, failing which, it will set out its independent view on the subject.
The ban on cryptocurrency
In April last year, the RBI issued a circular banning the use of cryptocurrencies. It directed all regulated entities – including banks – not to provide services to businesses dealing in virtual currencies (cryptocurrencies) like bitcoins. Entities already dealing with virtual currency had to exit the relationship within a specified time.
In June, an RTI response from the RBI showed that the ban was not backed by public consultation or independent research. The following month, the Supreme Court refused to grant interim relief on the RBI order, giving a setback for cryptocurrency exchanges and investors alike.
Zebpay shuts down
In October last year, Zebpay shutdown its cryptocurrency exchange saying that it was unable to find a “reasonable way” to conduct its business, after RBI’s directive. The crypto–exchange said in a blog post that the ban had disabled the company and their customers from “transacting business meaningfully.” In June 2018, it had warned users that they would be unable to cash in on their earnings due to the RBI directive.
In the same month, Central Crime Branch officials raided an ATM kiosk run by cryptocurrency exchange Unocoin in a mall in Bangalore. The police said that the kiosk was installed and operating without any license. Harish BV, co-founder and chief financial and compliance Officer, was also arrested and Rs 1.7 lakh in cash, 2 laptops, 5 debit cards, a passport and other documents were seized from him. The following month, Unocoin said that the private kiosk did not need a license or approval since the kiosk was not an ATM. It was installed with the “primary motive” of allowing Unocoin customers to withdraw or deposit money to their Unocoin accounts “subject to all rules governing cash transactions.” This money could further be used to buy and sell cryptocurrencies on Unocoin.