The Supreme Court of India, on Monday, said that Bitcoin trading in India was akin to running a “refined way of Hawala business.” This statement came during the hearing of a bail application filed by Shailesh Babulal Bhatt, who was arrested by the police for alleged illegal Bitcoin trading.
According to local reports, Justices Surya Kant and N Kotiswar Singh, who were handling the case, pointed out that the Centre has not yet introduced a clear regulatory framework for virtual currencies. Two years ago, the Supreme Court had asked the Centre to clarify its stance on Bitcoin trading and the regulation of virtual currencies. However, the Court noted that despite repeated requests, the Centre has failed to provide a response.
Justice Surya Kant commented that if there were proper regulations in place, Bitcoin trading would not have been problematic. He admitted that although he personally did not understand much about Bitcoin, it was clear that the absence of a regulatory system was causing issues.
Senior advocate Mukul Rohatgi, representing Bhatt, argued that trading in Bitcoin was not illegal in India. He reminded the Court that the Reserve Bank of India’s circular, which had previously imposed restrictions on cryptocurrency transactions, had been quashed by the Supreme Court.
Rohatgi emphasized Bitcoin’s enormous value and pointed out that it was being traded in several foreign countries. He shared that the value of one BTC was Rs. 82 lakh ($97,333) as of Sunday.
However, Additional Solicitor General Aishwarya Bhati, representing the Gujarat government and the Enforcement Directorate, stressed that the case went beyond the issue of Bitcoin trade. Bhati indicated that the legal case involved other aspects of criminal activity, such as fraudulent transactions, which were linked to Bhatt’s alleged involvement in illegal activities.
Bhatt, who was arrested on August 14, 2024, has been in custody ever since. He challenged the Gujarat High Court’s February 25 ruling, which denied him bail in the case.
The Supreme Court had previously dealt with a similar case in which multiple FIRs were registered against an individual accused of duping investors by enticing them to trade Bitcoin with promises of high returns.
In January 2024, the Centre told the Court it had not determined how to control cryptocurrencies and deal with related crimes. On February 25, 2022, the Court also asked the Centre to clarify if the trading of cryptocurrencies like Bitcoin was legal in India.
The Supreme Court has now ordered the Gujarat government and the Enforcement Directorate to reply to Bhatt’s bail plea within ten days. The next hearing is on May 19, 2025.
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