Overview

• The Supreme Court of India has criticized the central government for its prolonged inaction on cryptocurrency regulation, calling the absence of a legal framework a risk to the economy.
• Justices Surya Kant and N. Kotiswar Singh likened unregulated Bitcoin trading to a refined form of Hawala, raising concerns over illicit financial flows.
• The bench reiterated that an outright ban on cryptocurrencies would be unwise but emphasized the urgent need for tailored regulations to monitor and manage the sector.
• The government has requested additional time to provide instructions on its regulatory stance, with no new legislation introduced despite a 2021 draft bill remaining unaddressed.
• The court made these remarks during the bail hearing of Shailesh Bhatt, accused of Bitcoin-related fraud, questioning the Enforcement Directorate's procedural decisions in the case.