The Supreme Court on Friday told the central government to clarify its stance on the legality of cryptocurrency Bitcoin, reported Bar and Bench.
The court was hearing a petition filed by Ajay Bharadwaj, an accused person in the Rs 20,000 crore Bitcoin scam. Bharadwaj’s plea sought to quash the charges against him.
“Is it illegal or not? You have to make your stand clear,” the Supreme Court told Additional Solicitor General Aishwarya Bharti, representing the Centre.
In response, Bharti argued that the validity of Bitcoins was not in question in the case, reported NDTV. The additional solicitor general told the court that it was a case of fraud involving 80,000 Bitcoins and that the accused persons were not cooperating in investigation.
Over the last few months, the government has indicated on multiple occasions that it was considering to put a ban on private cryptocurrencies. However, no decision has been taken on the matter yet.
On November 23, an official document on the Winter Session of Parliament showed the Union government will introduce a Bill to ban all private cryptocurrencies in India. However, the Cryptocurrency and Regulation of Official Digital Currency Bill has not been placed in the House.
In her Budget speech on February 1, Finance Minister Nirmala Sitharaman had announced that the Reserve Bank of India will issue a new digital rupee using blockchain and other technologies during the financial year 2022-’23. She also announced a 30% tax on income made from thetransfer of digital assets. This tax will apply to cryptocurrencies and non-fungible tokens.
A couple of weeks later, Reserve Bank of India Deputy Governor T Rabi Sankar said that cryptocurrencies are similar to, or worse than ponzi schemes and should be banned.
However, while speaking on the tax on transfer of digital assets in Parliament earlier this month, Sitharaman did not present a clear stance on the matter, and said that the legitimacy of cryptocurrencies was a “different question”.
The Bitcoin scam case
Ajay Bharadwaj’s brother Amit Bharadwaj is the alleged mastermind of the scam, according to NDTV report. He allegedly operated a multi-level marketing scheme and lured investors by promising them 10% returns. At least 8,000 people got cheated in the scam
Amit Bharadwaj was arrested in March 2018, but later released on bail by the Supreme Court in 2019. He died of a cardiac arrest in January, and the police are now questioning Ajay Bharadwaj.
On Friday, the Supreme Court granted Ajay Bharadwaj an interim protection from arrest till it would hear the matter again after four weeks. The court also directed him to cooperate with the investigation.