IAMAI Moves Supreme Court Over RBI’s Cryptocurrency Ban

In a fresh petition against the RBI’s order dated April 6, disallowing regulated entities from dealing in virtual currencies or offering services to entities dealing with them, the IAMAI (Internet and Mobile Association of India) has moved the Supreme Court (SC) to issue a stay on the order.

The report stated that the IAMAI’s petition was filed in the apex court on Tuesday, according to the SC website. Also, IAMAI president Subho Ray confirmed the filing of the petition but did not want to comment till the matter was scheduled for a hearing.

It is to be noted that last year, several cryptocurrency exchanges had come together to form an industry body called the Digital and Blockchain Foundation of India in order to liaise with the government and the regulator.

However, in November 2017, the association was merged with the IAMAI. Crypto-exchanges that are part of the IAMAI includes Unocoin, Zebpay, and Conisecure among others.

According to the RBI order, the banks have three months to settle their businesses with entities and consumers dealing with cryptocurrencies.

Recently, the SBI notified its customers that it has discontinued cryptocurrency dealings through SBI cards. It is worth noting that leading Indian banks including HDFC, AXIS, YES, ICICI, and Kotak Mahindra banks have already stopped a slew of their services to cryptocurrency exchanges and other entities and traders.

Worldwide, a number of banks including Lloyds, Capital One, Bank Of America, Citibank and JP Morgan have already barred their customers from purchasing Bitcoin and other cryptocurrencies with their cards.

Recently, accepting the petition filed by Ahmedabad-based cryptocurrency startup Kali Digital EcoSystems, the Delhi High Court had issued a notice to the RBI, the Union of India through the secretary, ministry of finance and GST Council.

A number of companies and Bitcoin enthusiasts have already approached the SC and Delhi High Court on the matter.

Flinstone Technologies and Kali Digital had approached Delhi High Court last month, challenging the RBI circular “withdrawing banking support to virtual currency exchanges.”

Speaking on the matter, Rashmi Deshpande, associate partner, Khaitan & Co, advocate for petitioner Kali Digital, said, “The move by the RBI has put the burgeoning cryptocurrency sector in jeopardy and may affect the basic rights of such entities to carry on any trade. The circular appears to be arbitrary and unconstitutional since it does not give strong facts as to why the RBI is against the business of cryptocurrencies. Logical and well-thought arguments backed by solid facts are the primary requirements under the Constitution to put a stop to any business in India.”

Inc42 had earlier reported that the Supreme Court of India had issued a notice to the ministries of finance, law and justice, IT, SEBI, and the RBI while hearing a plea filed by petitioner Dwaipayan Bhowmick seeking a Bitcoin regulatory framework. In its 43-page petition, Bhowmick sought explanations regarding the delay in regulatory frameworks.

Speaking to Inc42, Dwaipayan said that the case is still in the registry court and there hasn’t been any development so far.

Recently, reports surfaced about a writ petition filed by a group of 11 different representatives from various crypto-related businesses challenging the constitutional validity of the RBI’s decision. Moneytradecoin and four other cryptocurrency exchanges had also filed petitions against the RBI order.

Apart from approaching courts, cryptocurrency enthusiasts have also started an online petition against the RBI’s stance of banning banks from dealing in cryptocurrency entities.

A petition on Change.org asks the RBI to take back its circular. Addressing the RBI and the Prime Minister of India, the petition — ‘Make India at the forefront of Blockchain Applications revolution’ — has been filed under the name ‘Digital Asset Exchanges of India’ and has received over 44K signatures.