India’s Central Bank to Appeal Supreme Court Crypto Decision
- The Reserve Bank of India is concerned that lifting the ban could pave the way for cryptocurrency trading.
- Imposed by the RBI back in April 2018, the ban was opposed by crypto exchanges and startups across the country.
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The Reserve Bank of India (RBI) is planning to fight the Supreme Court’s decision to overturn the ban it placed on crypto-related firms in 2018, the Economic Times reported on 6 March.
According to the publication, RBI is planning to put forward a review petition over the Supreme Court’s ruling to lift its ban on banks dealing with crypto businesses. One of the main reasons behind the bank’s response is its concern that lifting the ban could pave the way for cryptocurrency trading, which could put the banking system at risk.
The controversial ban, which was imposed by RBI back in April 2018, was lifted on 4 March following petitions by crypto exchanges and startups that opposed the decision made by the bank. The petitions were brought before the Supreme Court by the Internet & Mobile Association of India (IAMAI), a non-profit body which tries to appeal to the government on behalf of consumers, shareholders and investors. Nischal Shetty, the CEO and founder of Wazirx, one of the leading crypto exchanges in India, tweeted at the time:
Some cryptocurrency exchanges in the country, such as Unocoin and WazirX, have already announced that rupee bank account deposits and withdrawals have already been reinstated, doing so only days after the ban was lifted.
According to the 4 March court ruling, RBI had not shown that crypto trading was damaging to the banking system, which could mean that unless it is able to prove it, the Supreme Court’s decision will stand.
- The Enforcement Directorate of India froze WazirX’s bank accounts back in August, alleging the exchange had assisted “illegal loan apps” in laundering funds.
- The exchange explained that most accounts connected to ED’s investigation had already been flagged as suspicious, and blocked between 2020 and 2021.
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- CoinSwitch Kuber, one of India’s largest crypto exchanges, had five of its premises searched by Indian authorities, who alleged the company had violated forex laws.
- India’s Enforcement Directorate believed the exchange had acquired shares worth more than $250 million in contravention of forex laws, in addition to being non-compliant with KYC requirements.
- The exchange has stopped accepting payments through the United Payments Interface system only three days after its launch in India.
- The system is governed by the National Payment Corporation of India, which said it was “not aware of any crypto exchange using UPI” only hours after the exchange was launched.