Policy Watch
SC Grills Government: Why No Law or Agency for Cryptocurrency Cases?
The Supreme Court (SC) has directed the Union government to clarify its stance on establishing a federal agency dedicated to investigating criminal cases involving cryptocurrencies.
The court expressed its concern over the absence of a proper regulatory framework for digital currencies and the lack of an expert agency to conduct thorough investigations in such matters.
During the hearing on Thursday, a bench comprising Justices Surya Kant and Dipankar Datta raised pertinent questions regarding the government’s approach to handling cryptocurrency-related cases. The judges were surprised and disappointed that despite multiple assurances of considering legislation in this domain, the Centre has not taken concrete steps to regulate cryptocurrencies.
The bench emphasized the importance of having a specialized agency at the national level to handle the complex nature of transactions involving cryptocurrencies. The judges highlighted the challenges posed by such cases and questioned the effectiveness of investigations conducted by regular police personnel who might not have the necessary expertise.
“We want you to identify a national specialized agency, in the national interest. What kind of a quality investigation can you expect when you have a police constable, who gets promoted to an assistant sub-inspector or a sub-inspector, to handle such cases?” the bench inquired.
The lack of a proper regulatory framework and expert agency, according to the court, has resulted in innocent investors falling prey to fraudulent schemes related to cryptocurrencies. The bench urged the Centre to take swift action to prevent further financial losses and protect the interests of the country’s citizens.
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“It’s after all the country’s money, which is being siphoned off. It’s like hawala. Who has the responsibility to stop it? We thought you will yourself come forward and provide some solution,” the judges conveyed to Additional Solicitor General Vikramjit Banerjee, who represented the Centre.
The court’s attention to this matter came during the hearing of petitions filed by Ganesh Shivkumar Sagar, a Delhi resident, who is currently facing charges in multiple cryptocurrency fraud cases across Maharashtra, Gujarat, and Jharkhand. In one of the petitions, Sagar sought bail, while in another, he requested that all the cases against him be transferred to a central agency for investigation.
The Supreme Court’s directive puts pressure on the Union government to take decisive action in the realm of cryptocurrency regulation. As the popularity of digital currencies continues to rise, the need for robust legal measures and an expert investigative agency becomes even more apparent. The court’s plea for a legislative mechanism to address cryptocurrency-related crimes highlights the urgency of the matter.
The SC bench has set a precedent by bringing this issue to the forefront and urging the authorities to address the regulatory gaps promptly. The Centre’s response in the coming days will be crucial in determining the future direction of cryptocurrency regulation in the country and safeguarding the interests of investors from potential frauds and scams.
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