The outlook is dim for Indian cryptocurrencies after the Supreme Court ruling
Cryptocurrency in India just received bad news when the Supreme Court of this country rejected the lawsuit of Mr. Manu Prashant Wig - Director of Blue Fox Motion Picture company. Accordingly, Mr. Wig filed a lawsuit asking the court to direct the Indian government to develop laws regulating cryptocurrency activities in the country.
However, the reason for the refusal given by the court was because it believed that the real purpose of this petition was to seek bail for Mr. Wig himself, who is being detained on charges of "inciting people to commit suicide." invest in a fraudulent scheme”. Specifically, Mr. Wig is the CEO of Tokenz Limited, a cryptocurrency exchange in India. Recently, he was arrested by the Delhi Economic Crime Investigation Department because more than 130 victims accused him of defrauding and misappropriating their cryptocurrency investments. His wife was also summoned for investigation with similar allegations.
Therefore, the court held that Mr. Wig's petition was for the purpose of seeking bail and delaying the ongoing proceedings, and was not actually in the public interest. The court's rejection of this lawsuit means that the legal prospects of cryptocurrencies in India are increasingly murky. Previously, in 2020, the Supreme Court itself ruled in favor of cryptocurrencies when it annulled the Central Bank's (RBI) notice banning banks from supporting cryptocurrency activities.
This decision paved the way for the development of cryptocurrencies in India. However, since the beginning of 2022, the Indian government has changed its stance and applied strict control measures on cryptocurrencies. They imposed a 30% tax on profits from cryptocurrency mining, causing many companies to go out of business. The government also ordered the freezing of accounts of cryptocurrency exchanges and at least 10 exchanges had to stop operating completely. According to experts, this strict control policy poses many challenges for the development of Indian cryptocurrency. Many large blockchain companies were forced to move their headquarters abroad due to the unfavorable business environment.
The amount of capital invested in Indian cryptocurrencies decreased by 94% compared to the same period in 2021. In recent months, a number of domestic trading floors have been discovered to have signs of defrauding investors. In the first half of 2022 alone, Indians lost about $128 million in cryptocurrency scams. This has forced the authorities to tighten management even further. India's stance towards cryptocurrencies has come under closer scrutiny after September 2023, when the country pushed the G20 during its presidency to adopt global guidelines on cryptocurrencies without private law. India has kept the cryptocurrency bill in stock since 2021 but said it will decide its position in the coming months. Governments and cryptocurrency companies both need to be more responsible to ensure the healthy development of this sector.
The government should not prohibit but need to build a transparent legal framework, attract genuine investment and protect consumers. Cryptocurrency companies also need to comply with regulations and transparently disclose information to avoid accusations of fraud like Mr. Wig's case. Overall, the Supreme Court of India's rejection of this lawsuit may make the legal prospects of cryptocurrencies in this country more obscure. Hopefully, both the government and businesses will join hands to build a healthy environment, helping cryptocurrency develop for the common benefit of society.
