New Delhi: The Supreme Court docket on Friday highlighted the pressing want for a sturdy regulatory framework on cryptocurrency, observing that the present authorized provisions are “fully out of date” and unable to handle advanced points arising from the use and misuse of digital property like Bitcoin.
A bench comprising Justices Surya Kant, Dipankar Datta, and Vijay Bishnoi made the remarks whereas listening to a plea filed by Gujarat-based businessman Shailesh Babulal Bhatt, an accused in a number of cryptocurrency-related fraud circumstances throughout a number of states.
“There exists a gray space within the discipline of bitcoin/cryptocurrency regulation and the existing laws are fully out of date. They can not deal with this situation,” the court docket famous in the course of the proceedings.
Senior advocates Siddharth Dave and Mukul Rohatgi, showing for the petitioner, emphasised that the apex court docket had earlier requested the Legal professional Common of India to make clear the Centre’s place on regulating cryptocurrencies.
Referring to that change, Justice Kant recalled, “Once we have been asking them to have some regulatory mechanism, a really, very sweeping assertion was made — ‘no, no, we’re watching, we’re wanting on the worldwide financial circumstances’…”
Rohatgi additionally identified that current worldwide developments — together with the reported involvement of the U.S. President in cryptocurrency ventures — underscore the relevance of the difficulty. Justice Kant, turning to Further Solicitor Common Aishwarya Bhati, commented, “Completely different jurisdictions are saying various things about it. Some gray space is there, and the existing laws are fully out of date.”
ASG Bhati clarified that the difficulty within the current case was not Bhatt’s involvement in cryptocurrency per se, however quite his alleged felony misuse of it, particularly extortion and fraud. Nevertheless, the bench emphasised that their broader concern was the dearth of regulation, stating, “This case we’ll resolve both manner… our downside is (concerning the regulatory framework)… do one thing about that.”
The court docket has, in earlier hearings too, cautioned in opposition to a blanket ban on cryptocurrencies and burdened the necessity for clever regulation, evaluating unregulated Bitcoin buying and selling to hawala operations. It expressed that the absence of clear guidelines will increase the potential for abuse.
Arguing on the details of the case, Rohatgi contended that the petitioner had cooperated with the investigation and appeared earlier than companies on 15 events earlier than his arrest in August, 2024.
He claimed Bhatt had registered FIRs in opposition to native law enforcement officials for extortion and kidnapping involving Bitcoins, after which retaliatory FIRs have been lodged in opposition to him. But, he added, Bhatt was not charge-sheeted in both of the next FIRs.
In one of many two FIRs the place expenses have been filed, co-accused individuals have been named however not Bhatt, Rohatgi famous. He additionally submitted that whereas the Enforcement Directorate (ED) named Bhatt in its ECIR, he was not included within the company’s first prosecution criticism.
ASG Bhati opposed bail, arguing that the investigation was at a crucial stage and Bhatt remained non-cooperative.
“He initially claimed to be an investor, however has proven no paperwork to help this. His is a case purely of extortion,” she instructed the bench. She additionally defined that though KYC (Know Your Buyer) compliance is now mandated for Bitcoin wallets, enforcement is troublesome with non-KYC-compliant platforms.
After listening to each side, Justice Kant said, “We won’t remark that there’s nothing in opposition to you (petitioner) or one thing… we’ll take up the matter in July. (To the authorities) You full, in the meantime, no matter investigation…”
The Supreme Court docket has addressed the difficulty of cryptocurrency regulation in a number of previous hearings. In November 2023, a bench led by then Chief Justice DY Chandrachud declined to situation tips for buying and selling and mining of cryptocurrencies, holding that such issues fall below Parliament’s area.
An identical petition was dismissed in April 2025 by a bench of Justices BR Gavai and AG Masih, which held that the difficulty entails coverage concerns and directed the petitioner to make a illustration to the suitable authority.
In earlier cases, too, together with January 2024, the Court docket granted interim safety in crypto-related issues and directed the Union Authorities to make clear its regulatory stance. Nevertheless, no formal authorized framework has but been put in place.
