The Indian Supreme Court has criticized the Union government for the absence of regulations pertaining to cryptocurrencies in the country.
In a recent report by a local media outlet, the court expressed disappointment at the government’s failure to provide clear guidelines regarding the use of cryptocurrencies.
This concern arises in the context of an increasing number of criminal activities involving digital currencies.
Consequently, the court directed the Union government to clarify whether it intends to establish a specialized federal agency to investigate such crypto-related criminal cases.
During the hearing of petitions connected to cryptocurrency fraud cases across different states of India, the Supreme Court emphasized the urgent need for a proper legal framework.
It urged the government to respond and disclose its capacity to create a mechanism capable of effectively handling and investigating these cases.
The court’s primary aim is to safeguard the national interest by addressing the challenges posed by cryptocurrencies through a dedicated and expert agency.
The quest for comprehensive and well-defined crypto regulations in India has been a prolonged struggle.
The process of formulating a crypto bill was initiated in 2018 following the instructions of the Supreme Court.
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However, despite assurances over the past four years, the government has yet to present the final draft of this bill, leaving the crypto market in a state of uncertainty and ambiguity.
Meanwhile, even as the government remains hesitant in providing clear regulations, it moved quickly to impose taxation laws on cryptocurrencies, effective from April 2022.
These laws were introduced during a bullish market period when India witnessed a surge in crypto markets, with significant trading volumes and the emergence of numerous crypto unicorns.
However, the lack of regulatory clarity due to the absence of comprehensive guidelines led to a negative impact on the thriving crypto market.
Consequently, many established crypto firms chose to relocate outside of India to ensure more favorable operating conditions.
In conclusion, the Indian Supreme Court’s recent reprimand emphasizes the need for the government to expedite the formulation of crypto regulations.
With criminal activities on the rise and a flourishing crypto market at stake, the establishment of a specialized federal agency and clear guidelines is imperative for the country’s interests.
Until a concrete legal framework is in place, the uncertainty surrounding cryptocurrencies in India may continue to deter potential investors and impede the growth of the digital asset industry in the nation.
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