The final hearing of the ongoing case between crypto exchanges and the Reserve Bank of India (RBI) was held at the Supreme Court of India on September 11. However, the Supreme Court adjourned the case until September 12.
The Supreme Court will be hearing the case and the petitions filed against the circular issued by the RBI in April 2018. As per the RBI circular, the central bank issued a prohibitive ban that directed banks and other regulated financial institutions to refrain from providing services to cryptocurrency exchanges in particular and the crypto industry in general, within three months.
A number of crypto exchanges saw a substantial decline in the number of active users. The impact of the policy nullified the otherwise booming domestic cryptocurrency trading industry in the country. The Supreme Court denied granting a temporary stay against the RBI circular on July 3. This decision came days before the deadline that came into effect on July 6.
Quite predictably, the Indian crypto exchange operators challenged the RBI’s notice across the country’s courts. They argued that the RBI’s directive is unfair, arbitrary, and unconstitutional. A Right to Information (RTI) request from a domestic lawyer sought answers for the RBI’s policy in June. This forced the RBI to admit that it had not conducted any consultation or research prior to introducing its crippling policy, as mentioned in the CCN report.
After the RBI’s crackdown, several crypto exchanges saw a dramatic drop in trading volume and activity, as stated in the Ethereum World News report. For instance, from 200,000 traders at its peak, Unocoin saw a drop to 20,000 in July. The RBI was also joined by the Securities and Exchange Board of India (SEBI) in the ongoing skirmish with crypto exchanges struggling for survival. The RBI asserted that cryptocurrencies have no intrinsic value and compared them to Ponzi schemes. It also cited terrorism, money laundering, and tax evasion concerns to justify its anti-crypto stance.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]