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Supreme Court Resumes Hearing Arguments On Crypto Matter

21 Aug 2019

Continuing where it left off, the Internet and Mobile Association of India (IAMAI) continued its onslaught against the circular issued by the Reserve Bank of India (RBI) on April 5, 2018.Ashim Sood, the counsel for IAMAI, took examples of various countries and states and how they went about regulating cryptocurrency. Quoting Sood, crypto law advisory channel, Crypto Kanoon said, “Mr. Sood now explaining the law formulated by Wyoming (USA) to regulate Crypto assets and custodial services (Exchanges). Licensing requirement in NY statute is being explained. SEC guidelines on Howey’s test is being explained now on what is security token and what not.”#Crypto v.#RBIMatter is listed in Court no. 5 as item 1 today. Court has resumed.Crypto case hearing has started.Mr. Ashim Sood started his arguments. pic.twitter.com/OyyYnwzjsj— Crypto Kanoon (@cryptokanoon) August 20, 2019Apart from the United States of America, regulations in the European Union were taken into consideration. It was said, “Favourable regulatory guidelines of G20 countries explained and pointed out that most of the countries in g20 nations are inclined to regulate Crypto and are not treating industry players as bunch of criminals.”Sood, conceded that, yes there are dangers associated with cryptocurrencies. He added that, on one hand, we have countries such as UK, US, who are regulating cryptocurrencies after studying the technology and on the other, we have China and Indonesia. While it might not matter which side India falls, there is no point in banning something just because it has dangers.Referring to the circular, Sood said, “RBI purportedly took action in consumer protection, anti money laundering, terrorists financing etc. However in one of its doc (post circular), RBI realized that it pushed the transparent exchanges to dark port, people are resorting to peer to peer using cash. RBI purportedly took action in consumer protection, anti money laundering, terrorists financing etc. However in one of its doc (post circular), RBI realized that it pushed the transparent exchanges to dark port, people are resorting to peer to peer using cash.”He further said, “India has Consumer protection laws in existence which can be specifically made applicable to Crypto and special provisions can be formulated to deal with peculiar situations.”Sood said RBI circular is void on the ground of vagueness. It gives no definition of Crypto and seeks to crack down on all indiscriminately. A judgement was being read which holds that vagueness of rule is detrimental to its validity.Article 19 (1) (g), which grants the right to anyone to carry out any business will play an important role in this case. For the uninitiated, the Article states, “To practice any profession, or to carry on any occupation, trade or business.”As Sood concluded his arguments, Nakul Dewan, who is a senior advocate started presenting his arguments on behalf of cryptocurrency exchanges in India. Dewan talked about the evolution of money, from barter to gold, to fiat. He pointed out that when the United States of America objected to India and Iran’s deal of fuel, India took the recourse of fuel in exchange of fuel which would be classified as ‘peer-to-peer’ transaction.The senior advocate listed the central bank’s concerns and the counter arguments namely: No authorization to Crypto business (No law prescribes authorization); Hacking (So is with the Digital banking); consumer protection issues (Consumer protection laws can deal with it); No inherent value (Even fiat is not backed by anything as a matter of fact); Volatility (Stocks also have that) and use in Illicit activities (Laws like KYC AML etc. can be made applicable).Dewan reiterated some of the points put forward by Sood such as the advantages of blockchain technology and the Inter Ministerial Committee (IMC) report which was penned by various government departments in India.At this point, a judge intervened and said, “This report seems to guide only on the aspect how the technology can be used by Intra/ inter bank transfers. And not Crypto.” However, Dewan pointed out it also made provisions for official digital currency.At this point the court dispersed for lunch. This is a developing story.Liked what you read? Join us on Telegram

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