In a striking remark during a bail hearing on Monday, the Supreme Court of India likened Bitcoin trading to a “refined way of Hawala,” underscoring growing judicial concern over the unregulated status of virtual currencies in the country.
The comment emerged during proceedings for Shailesh Babulal Bhatt, who is facing charges of involvement in illegal cryptocurrency transactions. Justices Surya Kant and N. Kotiswar Singh, presiding over the case, criticized the central government for its ongoing failure to implement a clear regulatory framework governing digital assets.
The bench noted that the Centre had been urged to provide clarity on cryptocurrency regulation as far back as 2022, yet no concrete policy or legal guidelines have materialized. Justice Surya Kant acknowledged a limited personal understanding of Bitcoin but emphasized that a well-defined regulatory regime could have averted the current legal ambiguities.
Representing Bhatt, senior advocate Mukul Rohatgi contended that Bitcoin trading is not outlawed in India. He cited the 2020 Supreme Court ruling that nullified the Reserve Bank of India’s circular restricting cryptocurrency transactions, reaffirming the legal space for digital currency trading. Rohatgi also highlighted the global prevalence and high value of Bitcoin, noting that one BTC was valued at ₹82 lakh (approximately $97,333) as of Sunday.
However, Additional Solicitor General Aishwarya Bhati, speaking on behalf of the Gujarat government and the Enforcement Directorate, argued that the case went beyond mere cryptocurrency trading. She claimed that Bhatt was allegedly involved in a broader web of fraudulent financial activities, with digital assets playing a role in those schemes.
Bhatt has been in custody since his arrest on August 14, 2024, following the Gujarat High Court’s refusal to grant him bail on February 25. He is now appealing that decision.
This isn’t the Court’s first engagement with crypto-related disputes. Earlier, it dealt with a similar case involving multiple FIRs filed against an individual accused of defrauding investors under the guise of lucrative Bitcoin returns.
In January 2024, the Centre admitted before the Court that it had not finalized any framework to regulate cryptocurrencies or tackle crimes arising from their misuse. The Court reiterated this concern during Monday’s session, pointing to the ongoing legal vacuum.
The Supreme Court has now directed the Gujarat government and the Enforcement Directorate to submit their responses to Bhatt’s bail plea within ten days. The case is scheduled for further hearing on May 19, 2025.
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