- Indian court unexpectedly declares cryptocurrency transactions legal.
- Ruling contradicts the government’s strict stance and 30% tax on crypto.
- Verdict clarifies crypto’s legal status but may not align with the government’s view.
In a landmark decision that has raised a few eyebrows within India’s financial and regulatory sectors, an Indian state high court has ruled that cryptocurrency transactions are legal under Indian law.
This unexpected verdict, which stems from a case involving alleged fraud in a Ponzi scheme, directly contradicts the Indian government’s stringent stance on cryptocurrencies and its imposition of a 30% tax on crypto trades.
The central legal question was whether cryptocurrency-related activities could be considered offenses under the Prize Chits and Money Circulation Schemes (Banning) Act and the Odisha Protection of Interests of Depositors Act (OPID).
Justice Mishra, presiding over a single-judge bench, determined that cryptocurrency does not constitute as money as per these acts. Consequently, transactions involving cryptocurrencies are not illegal under these laws.
The case centered on two individuals accused of operating a fraudulent cryptocurrency company. They allegedly deceived investors by promising high returns with a digital currency called Yes World Token. The scheme mirrored multi-level marketing, where investors were encouraged to invest money and recruit others for additional gains.
Crucial to the court’s decision was the lack of evidence suggesting dishonest inducement or fraudulent practices by the accused. Justice Mishra emphasized that investments made by the public in cryptocurrencies, structured through trust wallets, did not meet the criteria for offenses such as cheating or forgery under relevant sections of the Indian Penal Code.
Justice Mishra stated in his ruling that the mere act of buying and selling cryptocurrency cannot be deemed illegal. This reinforces the court’s position that as long as crypto-asset transactions are conducted honestly and without deceptive intent, they do not violate existing financial regulations designed to protect investors.
The legal clarity provided by the state high court’s ruling has substantial implications for the regulatory landscape surrounding cryptocurrencies in India. Investors and stakeholders in the digital asset market now have a clearer understanding of the legal framework within which such transactions operate.
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