Supreme Court of India overruled the RBI Circular (Good news for Indians)

[webtricks]

A great day for crypto users in India. Finally a favorable verdict for us from the honorary Supreme court. I would like to thank Internet and Mobile Association of India (primary petitioner) and others. It wasn't an easy task to go against the invincible financial body of the country and win the case. It is also a tight slap on the face of people who claim that government controls RBI, courts, everything. There are already two-three active threads on this topic but I decided to create another one as I feel information in this thread should be separately shared so that it can get more exposure.

It was actually surprising for me because most of us thought it won't be possible to win the case, hence I decided to read the complete judgement of the Supreme Court on this case. I must say, it was quite fruitful and interesting to read. There are many points I find very exciting in the judgement, some of which are:

1. Inefficiency of Government - Even if you are the supporter of current government, you have to agree that government proved to be horribly inefficient in dealing with the matter of cryptocurrencies. Government created committee but surprisingly two bills drafted by them were contradictory. Hence court find those inappropriate to take into consideration for this case. It weakens the position of RBI in the case.

2. Doctrine of Proportionality - This doctrine states that if state decides to take away or make any intrusion in the liberty of people, such intrusion must be legal, must be in state interest and the means of adopting such intrusion must be correlated with public interest. However, RBI decision was not considered as proportional by court and the same is set aside by the court.

3. No loss to RBI regulated entities - This is the most important aspect considered by the court. Court came to the conclusion that none of the entity regulated by RBI has suffered any loss or adverse effect due to the accounts of Crypto Exchanges maintained with it. Thus, taking the case of State of Maharashtra v. Indian Hotel and Restaurants Association, as precedent, court considered this aspect sufficient to overrule RBI's circular.

Another important decision taken in the judgement is that court obliged RBI to direct the Central Bank of India (bank with which Koinex has account) to release ₹12 crores funds of Koinex freeze by the bank. Court found that since Koinex is not carrying unlawful business and not damaged bank in any way, there is no legal ground why the funds of Koinex shall be held by the bank. This decision has two positive impact for Indians:

• Koinex can once again come into service which they halt on 27th June, 2019.
• Banks have no ground to freeze your bank accounts if you are buying/selling cryptocurrencies with your bank account. You now have a power to legally sue your banks if they do so and this judgement will act as a precedent for your case.

Link to the judgement: https://main.sci.gov.in/supremecourt/2018/19230/19230_2018_4_1501_21151_Judgement_04-Mar-2020.pdf

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[erikalui]

Now hope that exchanges start operating soon as many shut down their business when the ban was effective due to no trades. Now atleast we can convert BTC to INR without worrying about banks freezing our account. But what if RBI files a review petition now?

And what about the banks that blocked accounts dealing with cryptos like SBI? Suing the bank won't be easy.

[webtricks]

Now hope that exchanges start operating soon as many shut down their business when the ban was effective due to no trades. Now atleast we can convert BTC to INR without worrying about banks freezing our account. But what if RBI files a review petition now?

I was reading the 6th section of the judgement i.e. 'unfolding of the plot' and position of RBI was very strong throughout the case. Petitioner side was humiliated many times by court and respondent side i.e. RBI was in comfortable position. It was easy win for RBI. However, as the case progressed, RBI didn't put enough efforts on winning this one. RBI just presented average counter-affidavit and most of their reasoning were based on general definitions (look like they searched from Google). No thorough research have been made by RBI in their response. 

With such lazy attitude from RBI, I don't think they gonna file review petition at all.

And what about the banks that blocked accounts dealing with cryptos like SBI? Suing the bank won't be easy.

It would be interesting to see how everything is restored. I think banks will unfreeze such accounts in upcoming days. Yeah, it is true that suing banks isn't easy. But at least we now have legal backing. Court made it pretty clear that dealing in cryptocurrencies is not at all unlawful, banks have no ground to freeze accounts.

[erikalui]

^Here are the arguments and the judgement given that led to the result: https://www.hindustantimes.com/india-news/in-cryptocurrency-verdict-sc-backed-rbi-on-8-counts-it-lost-on-1-point/story-4hflX7YAhfCxwd5Lri5ShL.html

Court did not bother to take into account other countries supporting crypto nor does it recognize or appreciate bitcoins but instead are interested in blockchain technology. Court only wondered why banks were stopped from trading the currency since there is no legal status with respect to VCs and hence lifted the ban. A real win would be the day VCs get a legal status but this is a good start. The lawyers put solid effort to win this case.

[0zero0]

It's really a good news for the crypto community. Yes I say "crypto community" as a whole because India is a densly populated country and has been in the fight for a long time. The fact that it has been delaying the verdict has been bothering many including myself but now since the judgement is very clear I hope the media and the masses will not criticize cryptocurrencies and will further encourage the use of crypto and the blockchain technology in India. I hope other countries will get inspired from India and start accepting crypto too.

[avikz]

Now Mohammed Danish from Crypto Kanoon and Fintech Lawyers had appealed to RBI so that RBI can issue an order to Banks to allow crypto related transactions. Because even after SC saying the ban as unconstitutional, RBI didn't issue any directive to Banks till date.

Ref: https://m.economictimes.com/markets/stocks/news/direct-banks-to-allow-crypto-trade-firms-to-reserve-bank/amp_articleshow/74624126.cms

[webtricks]

Now Mohammed Danish from Crypto Kanoon and Fintech Lawyers had appealed to RBI so that RBI can issue an order to Banks to allow crypto related transactions. Because even after SC saying the ban as unconstitutional, RBI didn't issue any directive to Banks till date.

Ref: https://m.economictimes.com/markets/stocks/news/direct-banks-to-allow-crypto-trade-firms-to-reserve-bank/amp_articleshow/74624126.cms

This was Supreme Court's comment on the lukewarm response of RBI in regards to the freezing of bank account of Koinex by Central Bank of India. Court said that it expected a better response from RBI when RBI replied that it didn't ask Central Bank of India to freeze the account. This shall be enough to figure out how slow and inefficient is the working of RBI. Like every other public institution, RBI is also full of red-tapism. I guess we have to wait more.  

[Cryptogames999]

I have seen the case went too long from a year and still going on. Now the Coronavirus halted cases for every court so it might happen after April 1.
I too lost hopes and thought Crypto will get ban in India, but from this thread it shows some good news.
RGI is lying all the time to avoid their rude business like Yes and Punjab banks where the cash is defrauded.

So what is the current news and when will the case start again?

[akram143]

I have seen the case went too long from a year and still going on. Now the Coronavirus halted cases for every court so it might happen after April 1.
I too lost hopes and thought Crypto will get ban in India, but from this thread it shows some good news.
RGI is lying all the time to avoid their rude business like Yes and Punjab banks where the cash is defrauded.

So what is the current news and when will the case start again?

FYI, Judgement for this case has been given already and its in the favour of cryptos,read OP before commenting on threads bro.

Corona made this things worse again after lot of positive news which could bring back the bullish trend on cryptos.

[webtricks]

Corona made this things worse again after lot of positive news which could bring back the bullish trend on cryptos.

Or can we say Corona has been a blessing in disguise?
I wanted to buy large amount of bitcoin from very long time however my target dip was not coming. But Corona gave me perfect opportunity to make investment. And the best thing about current fall is that it is not catastrophic. It is just speculative and will recover soon.

[akram143]

It is just speculative and will recover soon.

Its still questionable because this is not just financial crisis, its pandemic with global economic crisis so people will choose their lives over anything that is why most of them are converting cryptos into fiat for their needs.

But this is really blessing for someone who wanted to invest on bitcoins for very long term.

[Cryptogames999]

I have seen the case went too long from a year and still going on. Now the Coronavirus halted cases for every court so it might happen after April 1.
I too lost hopes and thought Crypto will get ban in India, but from this thread it shows some good news.
RGI is lying all the time to avoid their rude business like Yes and Punjab banks where the cash is defrauded.

So what is the current news and when will the case start again?

FYI, Judgement for this case has been given already and its in the favour of cryptos,read OP before commenting on threads bro.

Corona made this things worse again after lot of positive news which could bring back the bullish trend on cryptos.

Well I was reading the news from long time, but still I am in confuse that the case has won in the onpost.
Yeah, Novel Corona might made, but we have lost so much time in the past. However I am too looking ot buy something for investment. This is an opportunity to buy those who didn't bought in the past and the medicines are in investigate using Supercomputers.

[webtricks]

It is just speculative and will recover soon.

Its still questionable because this is not just financial crisis, its pandemic with global economic crisis so people will choose their lives over anything that is why most of them are converting cryptos into fiat for their needs.

Bitcoin is not that big. On ground level, corona pandemic hardly have any significant effect on Bitcoin and cryptocurrency ecosystem. So I doubt that many have actually  transferred their money from cryptocurrencies to more liquid form due to coronavirus. The extensive shrinkage of crypto market last week was entirely speculative in my view. Few sellers panicked and thought pandemic will have impact on cryptocurrencies in coming days so they sold. As a ripple effect which is very common in crypto market, prices continued to fall for next 3-4 days until we hit $3800 (momentarily). After that market stabilized and bounced back to $5000. It remained there for next 2-3 days and finally when traders gained their confidence back in cryptocurrecies, market started responding again since yesterday. Bitcoin alone has grown roughly 30-40% in last 2 days.

I am positive that we will regain Jan-Feb level if nothing chaotic happens in next 10 days.

[Sahyadri]

It is just speculative and will recover soon.

Its still questionable because this is not just financial crisis, its pandemic with global economic crisis so people will choose their lives over anything that is why most of them are converting cryptos into fiat for their needs.

Bitcoin is not that big. On ground level, corona pandemic hardly have any significant effect on Bitcoin and cryptocurrency ecosystem. So I doubt that many have actually  transferred their money from cryptocurrencies to more liquid form due to coronavirus. The extensive shrinkage of crypto market last week was entirely speculative in my view. Few sellers panicked and thought pandemic will have impact on cryptocurrencies in coming days so they sold. As a ripple effect which is very common in crypto market, prices continued to fall for next 3-4 days until we hit $3800 (momentarily). After that market stabilized and bounced back to $5000. It remained there for next 2-3 days and finally when traders gained their confidence back in cryptocurrecies, market started responding again since yesterday. Bitcoin alone has grown roughly 30-40% in last 2 days.

I am positive that we will regain Jan-Feb level if nothing chaotic happens in next 10 days.

Technical pretty much supported it. $3750 was a tight support, tough to break and sellers were almost wiped out by the 60% fall. Therefore, a jump was inevitable.

Regarding Akram's post about people selling off crypto to buy essentials. That doesn't make any sense at all. Right now people are taking out money from stocks and hence, have surplus which can be 'invested" in crypto to save it from the global economic crisis, also when crypto is in good light because of the recent ban removal. People are taking precautions and are quarantined and not spending hefty amounts on any fun activity, just food. No one needs savings to buy food.

[so98nn]

Your last bit was great to read. Banks have erupted badly when it was mad illegal in India last year. They literally seized bitcoin ATM too from Bangalore site. Hopefully we will see plenty of them one more time.

I guess covid 19 situation has to go off before Indians can think of such step ahead. Our economy is already going down a lot as can be seen with $1 - 75 INR ratio.

First fiat will stabilise then bitcoin will boom in India and subsequently we will start adapting other methods of payment.

I'm guessing UPI payment tangled with crypto currency will be the next hot topic in here.

[pawanjain]

Your last bit was great to read. Banks have erupted badly when it was mad illegal in India last year. They literally seized bitcoin ATM too from Bangalore site. Hopefully we will see plenty of them one more time.

I guess covid 19 situation has to go off before Indians can think of such step ahead. Our economy is already going down a lot as can be seen with $1 - 75 INR ratio.

First fiat will stabilise then bitcoin will boom in India and subsequently we will start adapting other methods of payment.

I agree that the Covid-19 situation is being really drastic now and this has to tend soon. It has indeed drowned the economy but what I can foresee is when the economy recovers, bitcoin and crypto will be the first thin to grow more than any other asset/commodity.
People might have sold their coins in order to buy food and groceries but as the pandemic situation ends these people will invest back in crypto.

I'm guessing UPI payment tangled with crypto currency will be the next hot topic in here.

That might not be a good idea since if someone hacks your UPI then all your savings might be at risk.
Cases of UPI hack are already in the news and it might not be that difficult for skilled hackers to crack into UPIs.

[chunnu39]

yes its a good move it will help to grow cryto industry in india.now more companies will securely came to india and local companies also invest in crypto projects and demand will increase which surely help in increasing adoption. but it will take some time next five year is very important for indian crypto industry