Government

July 17, 2017

SC gives four weeks' time to RBI for examining all security-related issues about cryptocurrencies


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Cryptocurrencies

Recently, a Public Interest Petition (PIL) was filed against the use and business of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as Bitcoins, litecoins, bbqcoins, dogecoins, etc.

The PIL was filed under Article 32 of the Constitution of India in the Supreme Court by Advocate Vijay Pal Dalmia along with an engineer (Siddharth Dalmia) and a law student against Union of India, Ministry of Home Affairs, Ministry of Finance, and Reserve Bank of India.

On July 14, 2017, a bench of CJI J.S. Khehar and Justice D. Y. Chandrachud, while disposing off the PIL, gave four weeks’ time to the RBI to examine all security-related issues about VCs and respond to the Petitioners.

The Writ Petition was for the issuance of Writ of Mandamus or any other appropriate Writ, order or direction directing the Respondents to take urgent steps for restraining the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs). This writ was an outcome of a cyber attack that occurred on May 13, 2017 by WannaCry ransomware.

These VCs are being traded and invested-in openly and extensively within the knowledge and domain of the Respondents anonymously over Internet for anti-national, illegal, and nefarious activities, including funding of terrorism and insurgency, illicit trade of arms and drugs, recruitment of terrorists, bribery, corruption and so on. These are believed to happen without any border restrictions or geographical constraints by avoiding and violating laws, thus endangering the integrity and sovereignty of India.

Among the laws being violated due to open dealings in illegal Cryptocurrencies are “The Constitution of India, 1950; Reserve Bank of India Act, 1934; The Foreign Exchange Management Act, 1999; The Reserve Bank of India Act, 1934; The Coinage Act, 1906; The Securities Contracts (Regulation) Act, 1956; The Sale of Goods Act, 1930; The Payment and Settlement Systems Act, 2007; and Indian Contract Act, 1872.”

The writ petition stated:

1. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to declare cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., as illegal;

2. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to take immediate steps in the present situation of emergency, for restraining and banning the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.;

3. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to ascertain the actual figure of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., that has been sold and purchased in India, and fix accountablity and responsibility for the same;

4. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to investigate and prosecute all those who have indulged in the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., that has been sold and purchased in India, and fix accountablity and responsibility for the same;

5. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to ban access of all website, web links and mobile applications, which are being used to buy and sellillegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc. and all other website and mobile applications which are accepting bitcoin as a payment option;

6. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to give advertisements and wide publicity through all media, educating public about the illegalities involved with the sale, purchase and dealing of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.;

7. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to implement existing laws, rules and regulations in true letter and spirit for prohibiting sale, purchase and dealing of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.,

8. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents, in case there is any deficiencies in existing laws, rules and regulations, to enact appropriate law and frame rules and regulations to regulate sale, purchase, dealing, holding and reporting of cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs).

For further information, please refer to the attached PDF.

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