Crypto-currencies tangle - Delhi HC issues notice to RBI, Govt & GST Council
Published: Apr 23, 2018
By TIOLCORPLAWS News Service
NEW DELHI, APRIL 23, 2018: The Delhi High Court has sought the response of the Centre, the RBI and the GST Council on a plea challenging a circular which prohibits banks and financial institutions from providing any service in relation to virtual currencies such as 'crypto-currencies'.
A bench of justices S Ravindra Bhat and A K Chawla issued notice to the Ministry of Finance, the RBI, which issued the circular, and the GST Council and sought their replies by May 24.
The order came on the plea by Gujarat-based company, Kali Digital Ecosystems Pvt Ltd, which was proposing to undertake the business of operating a crypto-currency exchange system for customers within India.
The company had claimed that it already undertaken substantial investment in that regard and planned to roll-out the exchange system, called 'Coin Recoil'.
However, due to the April 6 circular issued by the RBI, the company claimed it would not be able to avail banking services, imperative for its business, to operate it, the petition said.
Under the circular, entities regulated by the RBI was prohibited from providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies.
For entities which were already providing such services, three months time was given to them to cease such activity.
Apart from seeking quashing of the circular on the ground that it was "arbitrary, unconstitutional and violative of the Constitution", the petition also sought a direction to the GST Council to frame appropriate regulation on crypto-currencies.
A bench of justices S Ravindra Bhat and A K Chawla issued notice to the Ministry of Finance, the RBI, which issued the circular, and the GST Council and sought their replies by May 24.
The order came on the plea by Gujarat-based company, Kali Digital Ecosystems Pvt Ltd, which was proposing to undertake the business of operating a crypto-currency exchange system for customers within India.
The company had claimed that it already undertaken substantial investment in that regard and planned to roll-out the exchange system, called 'Coin Recoil'.
However, due to the April 6 circular issued by the RBI, the company claimed it would not be able to avail banking services, imperative for its business, to operate it, the petition said.
Under the circular, entities regulated by the RBI was prohibited from providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies.
For entities which were already providing such services, three months time was given to them to cease such activity.
Apart from seeking quashing of the circular on the ground that it was "arbitrary, unconstitutional and violative of the Constitution", the petition also sought a direction to the GST Council to frame appropriate regulation on crypto-currencies.
