Hit by the recent regulations barring banks from supporting any bitcoin-related transactions, Indian cryptocurrency exchanges have decided to pursue legal options. As many as six exchanges have taken legal recourse to challenge a Reserve Bank of India (RBI) order issued in April.
As per the Supreme Court website, four exchanges — Coindelta, Koinex, Throughbit Exchange and CoinDCX — have filed a joint writ petition against the RBI circular. Two other exchanges — CoinRecoil and MoneyTrade Coin — have filed separate cases in the Delhi High Court against the RBI and the Centre.
“Yes, a joint petition has been filed in the Supreme Court under Article 32 of the Constitution of India. However, since the matter is in court, we are not allowed to comment on it,” said the spokesperson of one of the companies.
According to Mohammed Danish, an independent law practitioner at the Supreme Court, the petition challenges the constitutional validity of the matter and that the next hearing is on May 17. Danish is also the founder of Cryptokanoon, a start-up founded by a team of lawyers engaged in regulatory analysis of virtual currencies.
Hearing on May 24
CoinRecoil’s petition in the Delhi High Court has been filed under Article 14 and Article 19 (1) (g), which talks about equal protection and freedom of trade, respectively. It will be heard on May 24.
Legal experts consulting bitcoin exchanges are of the view that the case filed by CoinRecoil has merit. The Ahmedabad-based exchange filed a case against the regulator for passing a directive without giving any valid reason or justification.
Prateek Bagaria, a partner at law firm Singularity Legal, said: “The RBI’s direction seems like a violation of Article 14 and Article 19. Besides, the petition also talks about the RBI’s direction on cryptos as being unreasoned. However, the RBI can always say it is a policy-based decision. We will have to wait and watch; the space is new and full of challenges not only in India but globally.”
Zebpay, the largest player in the Indian crypto space, said it is examining all its options. Another major player, Unocoin, has also not taken legal recourse though the business has been impacted drastically. This has led to an spurt in trading of cryptos in the grey market.