Bitcoin.com and livelaw.in have reported that the hearing at Supreme Court took place on 8th August 2019 and certain points were presented. The petitions are being heard by a bench consisting of justices Mr R F Nariman and Surya Kant.
There were two issues that were specifically discussed. One was the RBI circular of April 6 2018 prohibiting the Banks from providing any Banking facilities to the Crypto exchanges and the second is the action the Government of India is contemplating on regulating the Crypto currencies in India.
Comment 1: It is unfortunate that IAMAI (Internet and Mobile Association of India) is a party promoting the Crypto currencies. Its involvement in this case is like a CII or FICCI arguing that narcotics trade or arms trade should be legalized in India because the traders and industries can benefit from such trade. The industry body is exceeding its mandate and bringing pressure on the Government and RBI to introduce policies that are illegal and detrimental to the interests of the citizens of India rather than focus on business interests within the framework of what the policy makers allow.
The counsel for IMAI argued that since “Blockchain technology” is not disputed, the blanket ban on Virtual currencies built on this technology is “arbitrary, unfair and unconstitutional”.
Comment 2: The argument that if Blockchain technology is acceptable, any product or service built on that technology should be accepted exposes abject ignorance or dishonesty of the argument. This is like arguing that if Windows as a computing platform is acceptable, a virus created to run on windows or a crime using a windows vulnerability is constitutional and cannot be banned or punished.
The Court has to recognize that technology platform is different from how the platform is put to use for a particular product or service. Acceptance of Block chain technology cannot be termed as acceptance of all criminal activities that are conducted using the technology.
The counsel also argued that “No Study” was conducted by RBI before the decision was taken.
Comment 3: A “Study” or a “Committee” is not a pre condition for the RBI to take any policy decision. The internal expertise available with the executives and the publicly available information on the damage that crypto currencies may create to the monetary system in any country is adequate for the RBI to take the decision. The Supreme Court cannot be forced to lay down a principle that before any operative decision, RBI should mandatorily constitute a committee or conduct a study. This will be an interference in the day to day activities of RBI which is a statutory body regulating the monetary health of the country.
The Government has submitted the draft regulation on Crypto currency which it has prepared and expressed its intention to introduce it as a bill in the next session of the Parliament. It appears that this did not come up for discussion today.
The hearing has been now adjourned to August 14th.
The report in Bitcoin.com makes a false and misleading contention that the Secretary of the Ministry of Finance was removed immediately after the submission of the report on Crypto currency as if the two are connected. The Bitcoin community is now trying to influence Mrs Nirmala Sitharaman for a favourable view. It is also trying to mislead the public that “Crypto currency is not prohibited in India”, quoting a parliamentary answer given by Mr Anurag Thankur. This is a fraudulent misrepresentation aimed at cheating the public into entering into fresh transactions.
I urge the Government to ensure that “Promotion of Private Crypto currencies” as an alternative to legit currencies is also considered a punishable crime in the proposed bill.
The Government must take note of the attitude of the industry to challenge the sovereignty of the national currency system. One example of this attitude is revealed in the following statement (Refer livemint.com)
” Sathvik Vishwanath, CEO co-founder, Unocoin, said he doesn’t think the bill will be able to stop the dealings in cryptocurrencies even if it does come into effect. “Transactions are completely online,” he said. “It’s impossible to tell where it’s happening from…..it would be a bad idea for the government to ban cryptocurrency in India, because it might drive transactions underground…..a lot of people had moved their cryptocurrencies out of the country..”
” Ashish Singh, CEO of bZird, a digital marketing firm, said many cryptocurrency users in India keep their money abroad…..many Indian users don’t actually hold cryptocurrency accounts in their own name. Instead, they have friends in other countries who buy and sell currencies for them, and send the money through platforms such as PayPal”
The above are admissions of illegality and havala operations by Bitcoin businesses in India. I wish the honourable Supreme Court must take note of these views and the Government must initiate further inquiries with these executives to stop such illegal activities that they are referring to in these statements.