Indian High Court to Hear Case Against Central Bank Crypto Ban

NEWS
Sujha Sundararajan
Apr 23, 2018 at 14:35 UTC  |  Updated  Apr 23, 2018 at 14:40 UTC

The High Court of Delhi has issued a notice to India's central bank over its order barring banks from engaging with cryptocurrency services.

The move comes as the result of a petition lodged against the Reserve Bank of India by Kali Digital Ecosystems, an Indian firm planning to launch an exchange platform called CoinRecoil in August of this year.

The petition was filed last week, with Kali Digital Ecosystems seeking "an appropriate writ, order or direction quashing the circular." It said the ban is "arbitrary and unconstitutional" and that it is unable to begin operating due to the RBI's restrictions on banking services.

The firm also included the Indian government in the petition, including the Ministry of Finance and others, according to a statement from the firm.

The notice sent to the central bank effectively recognizes the company's petition at the high court. The next hearing over the case has been set for May 24.

Rashmi Deshpande from law firm Khaitan & Co. was quoted in the release as saying:

"The move by the RBI has put the burgeoning cryptocurrency sector in jeopardy and may affect the basic rights of such entities to carry on any trade."

In its circular, the RBI had said that financial institutions and banks under its authority can no longer deal with cryptocurrency exchanges and other related services.

Last November, the Indian Supreme Court asked the government to respond to a petition seeking clarity on the matter.

Taking a strict stance on cryptocurrencies, the RBI raised warnings in 2013 and 2017, cautioning "users, holders and traders" that it had not licensed any company in India to work with cryptocurrencies.

Statue of Justice image via Shutterstock

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