The Supreme Court on Wednesday dismissed a petition seeking the creation of a regulatory framework for cryptocurrencies, observing that the issue falls within the domain of policymakers and not the judiciary, according to a PTI report.
Cryptocurrency is a digital currency protected by cryptography and powered by blockchain technology. It regulates without a central authority and relies on decentralized networks. Bitcoin is the largest and most well-known followed by Ethereum. There are many alternative coins, often known as altcoins, in the cryptocurrency sector.
Justices B R Gavai and Augustine George Masih heard the case. The petitioners, through their counsel, contended that several complaints about cryptocurrency had been made around the country. In the absence of specific legislation, they urged the court to direct the Centre and other authorities to introduce regulatory measures.
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However, the bench stated that decisions related to policy and legislation fall under the government's jurisdiction, not the court's. Justice Gavai remarked, “It is in the domain of policymakers. How can we issue any such direction? We cannot lay down the law.” The judges advised the petitioners to approach the relevant government authority if they wished to pursue the matter further.
The petitioners also highlighted that individuals had approached police authorities in various states but were met with inaction due to the lack of regulatory clarity. Nevertheless, the court held firm that such issues should be addressed by the legislature or executive.
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Also, PTI reported that in January last year, the Centre had informed the apex court that it was still in the process of formulating a mechanism for regulating cryptocurrencies and investigating related offences.
This plea was taken up together with a second bail petition made by an individual accused in various instances of cryptocurrency-related fraud across states.
While India does not have a formal law regulating cryptocurrencies, there are procedures set up to control their use. They are not illegal to trade, but they are not accepted as official legal tender. The Finance Act of 2022 imposed a 30 per cent tax on profits from digital assets such as Ethereum and Bitcoin. The 1 per cent tax is deducted at source on each crypto transaction, and losses from trading cannot be offset against other income.
