SUMMARY
The Mumbai-based lawyer filed a public interest litigation with the Bombay High Court saying the government needs to enact crypto regulations
The petitioner alleges that he himself lost a lot of money due to the unscrupulous actions of a crypto trading platform
The Prime Minister had chaired a high-level meeting regarding crypto regulations this week.
A lawyer has filed public interest litigation (PIL) before the Bombay High Court requesting it to issue a Writ Mandamus directing the Union Government to formulate laws and regulations to govern the use of cryptocurrencies in the country.
According to Live Law, the lawyer feels that the government will not take urgent steps to govern cryptocurrencies unless mandated by the court, asserting that this will cause ‘immense prejudice, injustice, harm, injury and monetary losses not only to citizens but also the nation itself as it will lose an enormous amount of revenue by way of taxations’.
The petitioner Aditya Kadam, who is also a cryptocurrency investor said that the union government’s lackadaisical approach towards governing cryptocurrencies even after the Supreme Court’s judgement in the Internet Mobile Association vs. Reserve Bank of India (2020) is detrimental to the rights of investors.
In the Internet Mobile Association case, the apex court struck down the RBI circular imposing a complete ban on trading in cryptocurrencies by regulated financial institutions.
The development comes a day after Prime Minister Narendra Modi chaired a high-level meeting that discussed the way forwards regarding cryptocurrency, with the primary concern being ‘over-promising’ and ‘non-transparent’ advertising from crypto marketplaces and other businesses based in India.
According to several reports, the Department of Revenue is preparing a framework to levy taxes on crypto assets, and the Department of Economic Affairs is finalising the content of the draft Cryptocurrency Bill.
Last week, four people were arrested by the Kerala Police for allegedly running a Ponzi scheme masquerading as a cryptocurrency investment scheme, marking a sharp increase in the number of cryptocurrency-related scams.
The petitioner in the PIL alleged that he himself was a victim of such a scam himself from ‘Buyucoin’. According to him, when he tried to withdraw a substantial number of ‘Dogecoins’ (a popular meme-coin whose value spiked in May 2021) at the peak of its value, the transaction was stuck in Buyucoin’s gateway and was illegally revoked by the platform itself.
He says the coins were later returned to his wallet but only after their value had fallen sharply; causing him substantial losses.
