Trading in Bitcoin in India is refined way of doing Hawala business: Supreme Court

New Delhi: The Supreme Court on Monday said trading in Bitcoin in India is like "dealing with a refined way of Hawala business" as it lamented that the Centre has till now not come out with a clear regime on regulating virtual currency.

A bench of Justices Surya Kant and N Kotiswar Singh made the remarks while dealing with a bail application of Shailesh Babulal Bhatt who was arrested by the police for alleged illegal Bitcoin trade.

The bench said that two years back while dealing with a case related to Bitcoin trade it had asked the Centre to apprise the court about the policy regime on the trade of virtual currency but till now it has not received any response.

Senior advocate Mukul Rohatgi, appearing for Bhatt, submitted that trading in Bitcoin is not illegal in India after the apex court quashed a circular of the Reserve Bank of India and therefore his client was wrongly arrested.

Justice Surya Kant told Rohatgi that though he personally does not understand much about Bitcoin, but the court has been telling the Centre that if there is a regulatory regime, there will not be any problem.

"All I understand is that there are some genuine Bitcoin and some are fake Bitcoin,” Justice Surya Jant said and told Rohatgi, “You see, trading in Bitcoin in India is like dealing with a refined way of Hawala business. There are no regulations at present.”

Rohatgi said that Bitcoin has enormous value and one can walk into a showroom in a foreign country with just one bitcoin and buy a car.

"I checked on Sunday, the value of one Bitcoin was Rs 82 lakh," Rohatgi said, adding that he too does not understand much about the trade.

Additional Solicitor General Aishwarya Bhati, appearing for the Gujarat government and the Enforcement Directorate, said that they would like to file a detailed counter to the bail application as it was not about the bitcoin trade alone.

The top court gave 10 days to the state and the ED to file its response and listed it for hearing on May 19.

Bhatt has claimed that he was arrested by the police on August 14, last year and since then he has been in custody. He had challenged the February 25 order of the Gujarat High Court denying him bail in the case.

In January last year, the Centre informed the top court that it was yet to take a decision on a mechanism to regulate cryptocurrencies and effectively investigate related offences.

On February 25, 2022, the top court asked the Centre to make its stand clear on whether cryptocurrency trade involving bitcoin or any other such currencies is legal in India or not.

The top court was dealing with a case related to the quashing of multiple FIRs registered against an individual for allegedly duping investors across India by inducing them to trade in Bitcoin and assuring them of high returns.