India's Crypto Paradox: Taxed But Unregulated, Supreme Court Demands Action

India’s Supreme Court has raised its concerns to the central government over its prolonged silence on crypto regulation despite imposing taxes on digital assets like Bitcoin. It has voiced concerns about the growing use of Bitcoin (BTC) and other cryptocurrencies, which are still mainly unregulated. This is according to LawChakra, an Indian legal news outlet.

Justice Suryakant remarked, “This is a whole parallel economy running with such coins and is a danger to the economy of the country.”

Suryakant in her statement expressed her worries concerning the government's failure to control the cryptocurrency industry while enacting a tax on it.

“If you can tax it at 30%, also please regulate it as you have recognised it by taxing it,” the judge said.

In response to the judges concerns,  Additional Solicitor General (ASG) Aishwarya Bhatti, a senior legal officer representing the government of India  informed them that in the coming days the government might think about reexamining the topic of cryptocurrency legislation.

“We will take instructions my lord.”  ASG stated.

The report follows a discussion about the use of Bitcoin in India  that was carried out on 5th May by the Supreme Court during which Kant and lawyer Mahesh Jethmalani shared their views.

Mahesh Jethmalani, a senior advocate, described how Bitcoin is already widely used globally and emphasized its expanding importance in the global economy. 

He said, “People across the world are already using bitcoin.”

Kant also voiced his worries about cryptocurrency abuse. "There is some system of rules that applies to this," he stated. This statement meant that even though people are using bitcoin there should be regulation put in place to monitor its usage.

Despite taxing earnings and requiring businesses to disclose specific actions to financial regulators, the Indian government has not yet created comprehensive legislation to regulate cryptocurrencies. Amidst the asset class's ongoing expansion, the absence of regulation has been criticized by both the business and policymakers.