Title: Challenging a ban on crypto through Writ/PIL Post by: UKprod on May 01, 2021, 06:56:34 AM Hi everyone! This is my post on how crypto users can challenge a ban on crypto imposed by their government and obtain a favorable result against the same. I have kept this post to cover maximum number of jurisdictions, so that it helps crypto communities across the globe should their government impose an outright ban on crypto. Further, I kept legal jargons to the minimum, for ease of reading.
Legal ground to be taken:
Fact specific ground to be taken:
Possible arguments by government and how to counter those:
I hope this is useful. Do let me know in case you come across any other additional legal grounds that can be taken. I will be happy to incorporate the same in this post so that this can be used as a single reference point by everyone. Further, do let me know the fact specific grounds that can be taken for your country and I would be pleased to incorporate it into my post. Thank you. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: teosanru on May 01, 2021, 08:24:34 PM A really good post, Appreciate your efforts and research on this topic and if you see most of the PILs in different coutnries these only were the arguements raised by various attorneys. But I still think you won't be able to make a good case. Right to Freedom of profession theory doesn't work here because this thing does pose a threat to the central government system of Economics. I would state what RBI in India said against this appeal. They said the problem isn't demeaning of domestic currency or a Threat to forex Reserves. The problem is the control of liquidity. If a lot of people start to transact in cryptocurrencies government will not be able to do its basic activities of Credit Control in the country. In high Inflation times, the government tries to cut down inflation by reducing the interest rates or pumping in lesser money in the system. But this mechanism will fail if people move to an alternative mode of currency for transactions.
Moreover I think if the ban direction is from some central bank or through a notification from government this case can be fought but if Parliament/ Senate creates a law to ban cryptos chances of winning that case are pretty less. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: UKprod on May 02, 2021, 09:25:29 AM A really good post, Appreciate your efforts and research on this topic and if you see .... Thank you for kind words and your inputs. These are my baby steps towards creating a strong legal case for cryptocurrencies and your inputs are valuable to creating this. I would like to address a few points to the best of my ability and knowledge:
I have incorporated essentials points in relation to the above into my original post now, to make it very comprehensive. Once again, thank you for your inputs. PS: On a separate note, I do hope www.cryptorelief.in takes good measures during the current crisis and saves maximum lives and makes the whole crypto community proud. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: hugeblack on May 02, 2021, 11:34:07 AM Most countries have laws related to money laundering or foreign exchange management, according to which people are arrested. Hence, the matter moves from the right to engage in trade to sabotage the economy or support dark activities.
those who are targeted by governments are either individuals who are active in transferring between fiat and crypto or platforms, and therefore you will most likely not be in trouble if you HODLING your coins (you may have to pay taxes.) What you mentioned is good but will not apply to converting or trading cryptocurrencies. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: krypki on May 02, 2021, 04:01:58 PM I would second your point on ignorance of the Indian government in identifying the potential of crypto and NFTs in various use cases. To begin with, there is sufficient ambiguity in the definition of cryptocurrency as provided in the act. Quoting the definition as stated in the act- “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account…” Going by this definition, not just crypto currencies and NFTs, but several in-app tokens and coins could also be under scrutiny.
Title: Re: Challenging a ban on crypto through Writ/PIL Post by: Theb on May 02, 2021, 07:07:54 PM The hard thing about pursuing a legal remedy for a reversal on a ban in cryptocurrencies is they always find a way to overturn things as well as the citizens being faced by the government where they can have the best lawyers depending the law they have created. Just like what the RBI did regarding the Supreme Courts ruling about them prohibiting banks to not entertain crypto related transactions they still manage to find a way on creating a ban for the whole crypto industry. That is why for me legal remedies when it comes to bans like this has a slim chance of happening and for me the best thing to do is to wait and hope that their own government change their minds about this things. Biggest example here is why Marijuana even though it has been proven scientifically that it isn't harmful is still illegal in a lot of countries while we know that there are several groups in that country opposing their laws about it.
Title: Re: Challenging a ban on crypto through Writ/PIL Post by: UKprod on May 03, 2021, 05:57:31 PM Most countries have laws related to money laundering or foreign exchange management, ... Thank you for your inputs in relation to this post. Regarding your comments, I have thought through and jotted down the below points to the best of my knowledge:
Title: Re: Challenging a ban on crypto through Writ/PIL Post by: noorman0 on May 04, 2021, 01:48:53 PM
Some methods of money laundering that are difficult to track and disguise include the use of bitcoin mixers and NFT products. Centralized exchanges also do not apply KYC for small balances, it is possible for players to accumulate large amounts through small withdrawals from these exchanges. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: UKprod on May 05, 2021, 07:13:29 AM Some methods of money laundering that are difficult to track and disguise include the use of bitcoin mixers and NFT products. Centralized exchanges also do not apply KYC for small balances, it is possible for players to accumulate large amounts through small withdrawals from these exchanges. Thank you for your comments. Yes, I totally agree that money can be laundered by use of mixers and NFTs as well. However, a ban on cryptocurrencies in itself won't stop any criminal from using crypto as a means of money laundering. Such criminals will continue to use crypto even if it is banned because implementing a ban is 1000x more difficult than introducing a ban. Further, regarding KYC, as far as my experience goes, most reputed centralized exchanges do not allow any purchase of cryptocurrencies without the minimal KYC norms. Hence, these exchanges will have information on the user and of the transactions undertaken by the user. Once such data is available with them, they can track the aggregate of the transactions throughout a period and thereby identify large movement of crypto/cash. Government can then regulate the exchanges, requiring them to mandatorily share this information with them. Thereby, Government can track money laundering through crypto. I hope this addresses the points you raised. Thank you again for your inputs. I would like to take up a separate post providing how Government can regulate the cryptocurrencies, also considering how few of the governments have already implemented these laws. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: Theb on May 06, 2021, 01:43:01 PM ~snip When the ban of cryptocurrency as a legal tender in some country,it will reflected the price of bitcoin.Some government first ban the cryptocurrency then legalised the cryptocurrency to get some tax from that.Because by legalize,you need to pay tax to the government.Then the government also monitor the flow of money to the cryptocurrency in their country. Legalization doesn't automatically leads to additional taxes being generated or at least its the only reason why as from what I have seen there are no special kind of tax for cryptocurrencies alone but they often fall to an existing category which is mostly capital gains tax as legally they are classified as "assets" for them to not have additional precedent on having 2 or more legal tenders in their country. If cryptocurrency has been legalized it only means that they know themselves that they are left out and they are just missing an opportunity compared to the other countries who have accepted them earlier as they are missing out a blooming industry/market as well. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: Ryker1 on May 06, 2021, 09:52:40 PM Well, I would agree that money laundering regardless of any type of transactions being used will always be there. It is the criminals we have to stop from doing it and not the instruments they used as people also use it for good. People can always launder money not just in cryptocurrency. A simple software as a service would be the best option they would have if they want to do some money laundering --and not cryptocurrency. Taxes must always there, but people are only scared of paying taxes because they thought that they had to pay taxes even when they did not have any gains. This has to be cleared and we are all set up.
Title: Re: Challenging a ban on crypto through Writ/PIL Post by: raghavrkamath on June 01, 2021, 05:37:44 AM Hi everyone! This is my post on how crypto users can challenge a ban on crypto imposed by their government and obtain a favorable result against the same. I have kept this post to cover maximum number of jurisdictions, so that it helps crypto communities across the globe should their government impose an outright ban on crypto. Further, I kept legal jargons to the minimum, for ease of reading. This is a well researched post. Further, in India, the Apex bank had accepted such ruling by the courts and recently had said that earlier notification on Crypto currency wherein it had curbed the use of Crypto assets, now stand squashed. Considering the impact such legal decisions had, as rightly mentioned by you, it is need of the hour to consider such remedy against any unfavorable rules issued by Government. Title: Re: Challenging a ban on crypto through Writ/PIL Post by: UKprod on June 11, 2021, 08:32:00 AM This is a well researched post. Further, in India, the Apex bank had accepted such ruling by the courts and recently had said that earlier notification on Crypto currency wherein it had curbed the use of Crypto assets, now stand squashed. Considering the impact such legal decisions had, as rightly mentioned by you, it is need of the hour to consider such remedy against any unfavorable rules issued by Government. Thank you, for your kind words. Yes, it is true that it is need of the hour to first educate the government on the uses of cryptocurrency and not just ban it out of xenophobia. However, if the ban is implemented, then it would a colossal legal fights against the ban by the government. I'm sure a lot of organizations will get together to fight out the legal battle similar to what happened in India when RBI imposed a ban. I've written on the facts of the Crypto ban in India in a more detailed manner in this thread: https://bitcointalk.org/index.php?topic=5339221.0 |