The Supreme Court of India called the trade in bitcoins an advanced version of the informal system of money transfers “Havla”. This system works through proxies, without accompanying financial documents, bypassing traditional banks. “Havala” is often used by the Indians working abroad to transfer money to relatives.

The court considered the request for a bail filed by a resident of India, Shailsh Babula Bhatt. In August 2023, the Indian was detained on charges of illegal trade in bitcoins.

Judges of Surya Kant and Kotiswar Singh said that the consideration of the case complicates the absence of clear rules for supervision of crypto assets, which creates conditions for abuse.

Two years ago, the Supreme Court of India already appealed to the regulatory departments with a request to clarify the position of the authorities regarding the trade in bitcoins and the regulation of virtual currencies. Despite repeated requests, departments did not provide an answer to the court and did not create a regulatory framework for working with cryptocurrencies, the judges said. Surya Kant admitted that he is not very well versed in bitcoins, so the uncertainty with regulation makes it difficult to make a fair decision.

Lawyer Mukul Rohatgi, which protects the interests of Bhatta, claims that bitcoin trade does not violate Indian laws. He recalled that in March 2020, the Supreme Court canceled the ban on the reserve bank of India (RBI) to use bitcoin and other cryptocurrencies in the country. Rohatgi said that Bitcoin trade freely in many countries.

The prosecutor’s office, which is a charge in the court, said that the case went beyond the bitcoin trade. Bhatt is suspected of fraudulent transactions with cryptocurrencies and participation in illegal activities.

The man was arrested on August 14, 2024 and has since been in custody. He challenged the decision of the high court of the province of Gujarat to refuse to be released on bail. The Supreme Court ordered the Gudzharat government and the Office to ensure compliance with India’s regulatory requirements to respond to Bhatt’s petition to secure them within ten days. The next court hearing is scheduled for May 19.

Last year, the former Minister of Finance of India Pankaj Chaudhary said that in the near future the Indian authorities did not plan to work on the rules for regulating crypto assets. In September, the high court of Maras in India forbade freezing bank accounts of crypto investors.